Which entity typically responds to an authorization request?

In the context of an authorization request within electronic payment transactions, the entity that typically responds is the card issuer or an authorized agent. The card issuer is the financial institution that issued the credit or debit card to the cardholder. When a merchant requests authorization for a transaction, this request is sent to the card issuer to verify whether the cardholder has sufficient funds or credit available and whether the transaction can be approved.

The card issuer evaluates the request based on multiple factors, including account status, available credit, fraud detection measures, and transaction limits. Once the evaluation is complete, the card issuer sends back an authorization response, either approving or declining the transaction based on their criteria.

This process is crucial because it ensures that transactions are secure and that the risk of fraud is minimized. The other entities mentioned, such as the cardholder, the merchant, and the transaction processor, play roles in the transaction process but do not directly provide the authorization response. The cardholder initiates the payment, the merchant processes it, and the transaction processor facilitates communication between the merchant and the card issuer, but the final decision regarding authorization rests with the card issuer or its authorized agents.