Dynamic Authorization

Nium supports different authorization models that determine how clients participate in card transaction decision-making. Depending on the selected model, Nium may manage the authorization process entirely or involve the client in real-time authorization decisions.

When a cardholder makes an in-store purchase, an e-commerce transaction, or an ATM withdrawal, the authorization process follows the agreed model. Nium processes the transaction in accordance with the applicable authorization and network settlement flows.

Nium supports three transaction authorization models:

• Hosted Model
• Extended Model
• Delegated Model

Choosing an authorization model

The following table provides guidance on when each model may be suitable. These are typical scenarios rather than automatic eligibility criteria.

Model	Typical use case	Customer balance management	Final authorization decision
Hosted Model	Clients who want Nium to manage authorization without client-side authorization decisioning.	Nium	Nium
Extended Model	Clients who want the final authorization decision while Nium maintains and manages customer balances.	Nium	Client
Delegated Model	Clients with an appropriate regulatory setup who maintain their own customer ledger and want to perform customer balance checks and make authorization decisions.	Client	Client

important

The authorization model is determined on a case-by-case basis, considering the client's business model, regulatory setup, licensing status, ledger ownership, and other program requirements.

Clients should engage with their Nium representative to determine the most suitable model for their program. The appropriate model is typically assessed and agreed during the contracting and implementation phases.

Hosted Model

In the Hosted Model, Nium maintains and manages the customer's balance and makes the final authorization decision. Nium performs the applicable card verification, authorization controls, and balance checks without requiring the client to participate in the real-time authorization decision.

For implementation details, refer to the Hosted Model guide.

Extended Model

In the Extended Model, Nium maintains and manages the customer's balance while the client makes the final authorization decision.

Nium verifies the card and validates the customer balance during the transaction. Following a positive result, the client participates in the authorization decision and can apply its own rules. If the client approves the transaction, Nium debits the wallet and responds to the card network.

For implementation details, refer to the Extended Model guide.

Delegated Model

In the Delegated Model, the client maintains the customer ledger and makes the final authorization decision.

Nium performs card verification and checks the client's float or funding account during the transaction. Following a positive result, the client validates the customer balance against the transaction amount and applies any additional rules. If the client approves the transaction, Nium debits the float or funding source and responds to the card network.

For implementation details, refer to the Delegated Model guide.

note

The Nium One platform also supports funding in multiple currencies. Nium applies its multicurrency authorization logic during the authorization process.

Model comparison — check types

The following table shows which party performs each check across the three models.

Type of check	Hosted Model	Extended Model	Delegated Model
Card CHIP related checks	Nium	Nium	Nium
Card PIN or CVV2 (if applicable)	Nium	Nium	Nium
Velocity limits	Nium	Nium	Nium
Float or funding account check	Nium	N/A	Nium
Balance check	Nium	Nium	Client
Final authorization decision	Nium	Client	Client

Model comparison — transaction types

The following table shows which transaction types are sent to the client under each model.

Type of transaction	Hosted Model	Extended Model	Delegated Model
DEBIT	N/A	Yes	Yes
REVERSAL	N/A	No	Yes
ORIGINAL_CREDIT	N/A	No	Yes
ORIGINAL_CREDIT_REVERSAL	N/A	No	Yes
REVERSAL_ADVICE	N/A	No	Yes

note

Transactions are not sent to clients using the Hosted Model as part of the client-side authorization decisioning flow.

Account Validation transactions are not sent to clients using the Extended Model.