Why does my customer see a $1 charge when their payment failed?
When someone attempts to store their card to be charged later, we send over a request to their issuing bank for either a $0 or a $1 authorization (different banks permit different amounts) to verify that the card is issued and the bank will allow it to be authorized. Regardless of whether or not the authorization is declined, we reverse our authorization request immediately. However, even if the bank declines the authorization, some people may still see an authorization for $1 on their credit card statement. The important thing to remember is that this is not a charge, and it will disappear from their statement; depending on the bank, it will be removed from their statement in anywhere from a few minutes to a few weeks.
It’s also important to note that just because the bank approved a $1 authorization, it doesn’t guarantee approval when you actually charge the card. The authorization helps weed out a lot of the cards that would definitely be problematic, but it’s not able to guarantee that your next payment will be successful.