When is this feature useful?
Do you sell products with limited stock availability? Or offer services where the final price cannot be determined in advance? With the 24pay payment gateway, the pre-authorization feature helps you avoid payment cancellations in these situations.
How pre-authorization works
Pre-authorized payments are card transactions authorized in advance, with the customer’s funds reserved but not yet transferred. As a merchant, you can then decide whether to:
accept the payment – in this case, the funds remain held from the customer’s account,
decline the payment – the reserved amount is released back to the customer,
or capture only a partial amount.
From the customer’s point of view, it looks like a regular card payment. While the funds are reserved, the customer cannot access them - they cannot be withdrawn from an ATM or used for another transaction. The amount is only charged if the customer uses the service and the final amount depends on the extent to which the service was used.
Transactions can be pre-authorized for up to 7 calendar days for VISA cards and up to 14 days for MasterCard and Maestro cards.
This feature is most commonly used by hotels when reserving accommodation, car rental companies and similar service providers.
More reasons to use pre-authorization
Pre-authorization can also serve as an additional layer of protection. For example, in cases when you suspect a fraudulent online payment. It gives you time to decide whether to ship the goods or ignore the payment. If you choose not to proceed, the reserved funds will be automatically returned to the payer's account after a certain period.
In addition to pre-authorization, the 24pay payment gateway offers other useful features. Read more about them HERE.