Pré-autorização | Credit card pre-authorization
Pré-autorização | Credit card pre-authorization

Understanding credit card pre-authorization benefits

Credit card pre-authorization – also known as pre-auth – is a valuable feature that can provide a number of benefits for online stores. However, these advantages are not always completely clear to merchants. After all, why reserve the amounts instead of charging the customer right there and then? Why may it reduce chargeback rates and also deliver a better customer experience?

 

What is a credit card pre-authorization?

A credit card pre-auth is when a merchant reserves a transaction amount temporarily on a credit card, but only debits the amount after a few hours or days. This way, merchants can guarantee the availability of a payment amount for a specific transaction before it is finally confirmed. Therefore, the purchase is only complete after the amount has been captured, or, in other words, definitely debited to the card.

 

Understanding the benefits of credit card pre-auth

Credit card pre-authorization gives merchants more time to decide whether or not to proceed with a transaction, without being charged any transaction fees. This feature adds a series of benefits, such as…

Fewer chargebacks

Enabling credit card pre-authorization avoids chargebacks because additional fraud checks can be performed while the payment amount is reserved. This reduces fraudulent chargeback occurrences and allows merchants to process payments safely.

Avoids refunds

Deposits can be made without actually processing a payment. Suppose a customer has rented a car and the company needs a security deposit. Instead of first charging and later refunding the customer, the amount is simply reserved and later made available again. The credit card limit is freed up after the car is dropped off, as the transaction has not been captured.

Enables inventory confirmation

Pre-auth also allows merchants to check for product availability before moving forward with the capture. Suppose a customer has ordered an item for which availability is uncertain. If it is finally not available, instead of refunding the customer, the amount is simply made available once again to the buyer’s credit card limit by canceling the pre-authorization or by simply not capturing it.

Enhances customer experience

If there is any trouble with the order, having the funds available within a few days helps mitigate the customer’s frustrations, providing a better experience. In addition, merchants may also cancel a pre-auth and release the reserved amount.

 

PagBrasil’s comprehensive credit card pre-auth features

PagBrasil supports credit card pre-authorization and partial capture for domestic and international credit cards. Our comprehensive benefits include:

•   Extended 14-day pre-auth reservation
•   Capture cancelation via API
•   Pre-auth cannot be refused until the capture

Learn more about our credit card solutions for Brazil and get in touch today to discover more about PagBrasil!

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