This feature is a set of requests that manage the authorisation from a customer to the merchant to debit the customer’s card in future. It is used in situations where the future cost of goods and services are unknown or as security/deposit for goods and services currently being provided. Examples include bar tabs, hotel check-ins and vehicle rental.
There are seven requests that make up the Pre-Auth feature set. Each request is required to be implemented by the POS to support the Pre-Auth feature. Visa and Mastercard support all the requests while other schemes may only support a limited number. A breakdown of scheme support and an explanation of each request is provided below.
Pre-authorisation: This is the initial request used to set up a Pre-Authorisation on a cardholders credit account. The funds will be reserved on the cardholders account until another request completes, cancels or edits the held amount or the Pre-Auth expires. The time until expiry differs between schemes but is roughly two weeks.
Pre-auth complete: This is a request used to complete a Pre-Auth and confirm payment for goods and services. The amount completed can be above or below the original Pre-Auth amount request. If the Pre-Auth complete amount is below the original Pre-Auth amount the remaining funds will be released back into the account. It requires the merchant to enter a valid Pre-Auth ID.
Pre-auth cancel: This request will cancel a Pre-Auth and release the held funds back into the cardholder’s account. This can sometimes take up to 48 hours. It requires the merchant to enter a valid Pre-Auth ID for the desired Pre-Auth.
Pre-auth partial cancel: This request will reduce the amount reserved on the cardholder's account to a new total. It requires the merchant to enter a valid Pre-Auth ID for the desired Pre-Auth and how much they would like deducted from the original total.
Pre-auth top up: This request increases the funds reserved on the cardholder's account a current Pre-Auth total to a new higher total. It requires the merchant to enter a valid Pre-Auth ID for the desired Pre-Auth and the amount to be added to the current Pre-Auth available total.
Pre-auth extend: This request will increase the time limit on a current Pre-Auth by two weeks from the time it is extended. A Pre-Auth can be extended any number of times. This request is used when a Pre-Auth is required for longer than the standard time limit (roughly 2 weeks). It requires the merchant to enter a valid Pre-Auth ID.
Account verify: This request is used to verify that a cardholder's account is active and valid. It is used by merchants to ensure that a Pre-Auth with be successful if completed or if a card is valid if they simply wish to hold the card as security. An example includes holding a card while the cardholder is renting an item for an activity where there is an option to purchase further goods or services i.e. Leaving a credit card as security for a putter when playing Putt-putt golf with the option to purchase beverages and pay at the end.