Payment Processing - Pre-authorizations

Pre-authorizations are used to hold funds on a customers credit card for a period of 2-7 days depending on the institution. Lately most appear to be about 2 days.
The pre-authorization must be completed using a pre-auth capture. If you don't use the pre-auth capture, you will either reserve the funds twice (upsetting the customer) or the transaction will be declined.

The pre-authorization system was designed for the restaurant industry and tips, not the rental industry and deposits. This causes a few issues.

• If the final captured amount is more than a 25% difference from the original amount, large transaction fees are usually levied.
• For some processors using datacap netepay, datacap must be changed to the restaurant mode, and this prevents some Purchase Card transactions from succeeding.
• Some EMV (chip and pin) systems no longer support pre-authorizations as the customers are adding the tip amount into the payment terminal and it also removes the requirement for storing credit cards.

A pre-auth can expire without the merchant knowing. If the merchant then attempts to complete the pre-auth transaction, the transaction may appear to initially succeed, but may be declined in the final settlement if the customer's credit limit is exceeded.
Customers using Visa / Mastercard debit cards will see the pre-auth amount debited immediately from their bank account, which may upset them if they are not notified of the amount you are pre-authorizing for.

An alternative to pre-authorization is that rental deposits should be taken as a full deposit and then refund the difference when the equipment is returned.

• Mercury Payments US
• Mercury Canada legacy credit card account (not EMV, which means the merchant may be liable for any fraudulent transactions).
• Desjardins Canada Obsolete
• Global Canada

Pre-auth is not available on:

• Mercury Canada EMV (use legacy account)
• Moneris Canada EMV
• Paymentech Canada EMV