This setting allows the payment gateway to authorize the transaction at checkout (which involves checking the submitted credit card for address verification and account standing) but does not actually charge the card. You will need to go to the individual order (Sales > Orders) and complete the charge manually.

Under the Authorize Only setting you have several payment processing options:

Charge

Void

If your payment gateways credit card processing is set to Authorize-only you can Void orders when needed to cancel the authorization. If you have already charged the order then you would have to Refund the payment to cancel the transaction. Once the order is voided you can change the order status to Cancelled manually.

Refund

You can use the Refund button if you have already charged an order and need to Refund the payment. If you are refunding the full order amount please ensure that the correct amount to be refunded is in the Refund Amount field and click the Refund Button. Once the order has been refunded you can change the order status to Cancelled manually.

Partial Refund

You can refund part of an order amount using the Refund button if you have already charged an order and need to Refund part of the payment . Simply enter the amount to be refunded in the Refund Amount field and Click the Refund Button.