As an online shopper, you’ve likely come across the terms authorization and pre-authorization during online transactions, but do you know exactly what they mean and how they affect your purchase? In this blog, I will clarify the difference between authorization and pre-authorization.
Authorization is a real-time transaction that doesn’t require additional confirmation from the merchant to charge the customer’s card. This means that when you make a purchase through the CorvusPay system, the funds on your card will be immediately deducted, and you will be charged in real-time. It is a fast and efficient way to execute transactions, allowing web shops to process your order almost immediately.
On the other hand, pre-authorization is a type of transaction used in situations where a web shop needs to verify the availability of a product or service before actually charging your card. With this option, funds on your card are reserved, but the charge does not happen immediately. Instead, the charge is completed only after the merchant confirms the transaction. The merchant can confirm it for a lesser amount than pre-authorized if they cannot deliver something as initially planned.
If you are a merchant, authorization and pre-authorization are two different types of transactions you can use through the CorvusPay system. Authorization is fast and immediately charges the funds on the card, while pre-authorization is useful when you need additional confirmation or verification of product or service availability before charging.
The completion deadline for pre-authorization (meaning the timeframe in which you can confirm it) depends on the bank that issued the customer’s card. It’s important to note that once the pre-authorization expires at the bank, you won’t be able to complete the transaction. If you haven’t completed the transaction within the timeframe, the only way to charge is to ask the customer to repeat the purchase. Therefore, I always recommend to merchants to confirm the transaction within seven days – within that time frame, they are sure they can complete the charge. And yes, you can complete the transaction partially if there’s something the customer bought that you can’t deliver.
I hope this blog has been helpful. Talk to you soon! Wink-wink 😉
Edgar, your partner in flight