With proliferation of web commerce, there is an inherent need to process credit card orders in various ERP applications. Having a credit card on the order and pre-authorizing the transaction, serves as a payment guarantee and virtually eliminates the risk of non-payment. This is an important consideration while fulfilling retail orders. However, it is increasing being adopted in some business to business commerce scenarios as well since many companies issue corporate credit cards to their procurement personnel.

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SAP has inbuilt functionality to handle credit card orders, however only a few companies have put this feature into practice. In fact, less than 10% of the customers I have come across in the last 17+ years of my consulting experience, are utilizing this feature. One probable reason for this is that majority of the customers haven’t integrated their SAP environment with any e-commerce platform or market places like Amazon or eBay as yet. The second reason is data security and PCI compliance aspect when it comes to dealing with credit card information.

Needless to say that they are missing out on a huge opportunity. Millions of retail buyers as well as dealers are trying to find a way to buy products in the most hassle free manner. However not many manufacturers list their products online. They are relying on traditional distribution channels like wholesalers, dealers and stockist. Some of the latter are smart enough to list the products on marketplaces or sell the products through their own web-commerce platform. Having understood the context, let us look at key steps on how credit card processing can be enabled within SAP.


Payment Gateway and External Capture of funds

Storing sensitive data within any internal application has vast ramifications in the event of a security breach. Managing credit card information and related transaction is one such business case. Storing credit card details is unsurprisingly, a strict no for organization if they are not specialized in data security and data encryption. Hence external payment processor coming into picture. Many banking institution provide their card processing services for a small transaction fee.


Get to know how accounting entries are handled when a credit card order moves through the order cycle in this simple to understand cycle.


Thus it can be said that when a buyer is checking out and putting in the credit card details, the verification of the credit card as well as financial transaction is carried out by these gateways. The credit card information is never stored by the merchant. Thus in our case these transactions are external to SAP.

Credit Card Processing Steps in SAP

Understanding the process of credit card authorization and fund capture

A key difference when it comes to traditional order and credit card is that at the time of processing the order, the credit card is first validated and also fund equal to order amount (including tax and shipping charges) is blocked. Hence if the credit card had a credit availability of $2,500 and the order amount including tax and shipping is $700, after successful order placement, the available credit balance would be $1,800 and $700 would reflect as blocked under the name of the merchant.

Usually, when the goods are shipped, the funds are captured from the credit card. However, the capturing of the funds can also be done at the following stages

  • Funds captured at order placement – Most of the payment gateways allow capturing of the fund at the time of order placement. Hence the funds are collected from the card at quite an early stage in the order life-cycle.


  • Funds capture at Post Goods Issue – The funds could also be captured whenever the goods are dispatched.  This is the most usual business case.


  • Funds capture at POD – Some of the merchant capture the funds at the time the goods are received by the customer. This is usually in case where the customers are trustworthy and the products are not made to order.


Authorized versus captured amounts

It might be noted that there can be a difference between authorized and captured amounts. The captured amount can only be less or equal to the amount authorized. This is usually the case when for example when accurate freight cannot be determined at the time of order placement. It is usually suggested to authorize an amount which is slightly more than the order amount.

By doing this, it saves the hassle of re-authorizing the order again at the time of delivery. Hence in this case, lets say that if the order amount was $100.00, let’s say the authorized amount was $110.00. If the freight determined was $5.00, then the captured amount is $105.00. Had the authorization been only for $100.00, the order would have to be reauthorized. It might be noted that in most of the cases, if the authorization is partially captured, the transaction becomes void. Hence the remaining amount cannot be captured again.

It might be noted that an authorization is valid only for certain horizon. If the delivery is outside this period, then the order would need to be re-authorized in order to have the delivery go through.

Configuration needed in SAP for enabling credit card process 

Though a detailed configuration is needed in SAP to handle credit card payments, the steps mentioned and shown in the slides below are the key ones for the process to work. They cover all the concepts that you need to understand for carrying out an end to end processing of such an order.

In the above slides, the following steps have been shown. The details are mentioned below.
Step #1. Defining Card Types and their respective authorization validity

You can define different card types which are allowed and also maintain the authorization validity for various cards. The configuration node is shown in slide. It may be a good starting point to ask your payment gateway.

Step #2 Maintain clearing house for the card payments

Under this we need to configure the account determination settings for credit card payments. The clearing account is the G/L account where the postings against customer receivables are offset intermediately until the settlement is done. As mentioned earlier the accounting document is already in cleared mode for a credit card order. The customer receivable is always cleared by an entry against this account.

Step #3 Maintain Settlement Account

In this setting, the clearing account is maintained for the G/L account mentioned above. When the accounting document is posted, the account maintained in step b is posted to. The settlement account is the final clearing account.

Difference between a SAP Credit Card and a non Credit Card order

The credit card information is passed on to the order in the header data as shown below. As can be seen, for this order, the total authorized amount is EUR 941.61. The card numbers are not captured as the authorization is done in an external payment gateway.


Screenshot of Credit Card order in SAP

When the post goods issue and invoicing happens in SAP, the accounting document is automatic cleared and there are no customer open items. As can be seen the account receivables have been cleared and posting has happened in the clearing house G/L. A periodic settlement program (transaction FCC1) clears the above temporary account and posts to the settlement account.

SAP Order automatic clearing


Enabling Credit Card processing for global commerce

Agile companies are leveraging multi-channel commerce and spreading their reach and doing more business targeting customers across the globe. Credit card configuration gives these companies an edge by better control of how they sell in the new digital economy in a risk free manner.

If you have not yet started pondering over how your enterprise can benefit from the eCommerce, it is high time that you start building your multi-channel commerce strategy. Listing your products directly from SAP to market places and getting orders from there is also something which your organization must explore.