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Pre-Authorization
A pre-authorization enables you to authorize a payment when the final amount is unknown. The system places the funds on hold until you request a follow-up transaction. Pre-authorizations are typically used for lodging, auto rental, e-commerce, and restaurant transactions.
Payment Services Directive 2 (PSD2) rules in the European Union (EU) and European Economic Area (EEA) require the initial pre-authorization to use strong customer authentication for merchants or customers in PSD2-applicable countries.
When you have a specific merchant category code (MCC) assigned to your account, you
are allowed to capture up to 20% more than the cumulatively authorized amount on
Visa, Diners, Discover, and JCB cards. Contact your account manager to have your
account enabled for this option.
For a pre-authorization:
- The authorization amount is greater than zero.
- Submit the authorization for capture within 30 calendar days of its request.
- After 30 calendar days, the customer bank (issuer) releases the hold on the authorized amount.
- Send a new authorization request to claim the amount.