Pre-Authorization
In this article, you will learn what pre-authorizations are, when they are used, and how to apply them in Payrexx.
A pre-authorization is the reservation of an amount in the form of a payment guarantee. The amount is not charged to the card but merely reserved and held for a predefined period of time.
Payment Guarantee for the Merchant
A pre-authorization provides the merchant with the assurance that sufficient funds are available on the customer’s card. Since the customer cannot access the reserved amount during the pre-authorization period, it serves as a payment guarantee for the merchant.
The actual charge only occurs once the merchant provides the service. Depending on the use case, the merchant can charge either the full reserved amount or only part of it.
Use Cases for Pre-Authorizations
Pre-authorizations are often used in industries where the final amount of a service can only be determined at a later stage. Common examples include hotels and car rental companies.
Hotels
Pre-authorizations are commonly used in hotels. Pre-authorized payments allow funds to be reserved either during the booking phase or at check-in. By reserving an amount, it ensures that a guest does not leave without paying and covers additional costs such as minibar or spa services.
Example
A guest books a hotel room for EUR 200.00.
At check-in, the hotel reserves EUR 300.00 on the guest’s card.
The guest consumes EUR 30.00 from the minibar.
The hotel charges EUR 230.00 to the guest’s card and releases the pre-authorization.
Car rental companies
Car rental companies also commonly use pre-authorizations. By reserving funds when the vehicle is picked up, they can ensure that the car is returned in the agreed condition and with a full tank, or that any resulting costs can be covered if this is not the case.
Integration
Pre-authorizations can be used in Payrexx in two ways:
via Payrexx tools
via API or Gateway
Via Payrexx tools
To use pre-authorizations via the Payrexx tools, you must first set up a payment provider that supports pre-authorizations. You can find out which providers support this functionality in the following article:
Payment Provider Feature MatrixAfterwards, you can use pre-authorizations in the following tools:
Instructions on how to create pre-authorizations and capture amounts can be found in the following article:
Pre-AuthorizationVia API or Gateway
Information and instructions for implementing pre-authorization as a payment method via API or Gateway can be found in our developer documentation:
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