Transaction authorization is the process that verifies whether a transaction can proceed. It typically involves checking the availability of funds, confirming the identity of the person making the transaction, and ensuring compliance with security protocols. This step is crucial in preventing fraud and ensuring that only legitimate transactions are completed. Once a transaction is initiated, systems like payment gateways or bank servers assess the request. If everything checks out, authorization is granted, allowing the transaction to move forward. If there are issues, such as insufficient funds or suspicious activity, the transaction may be declined to protect both the consumer and the merchant.