Pre-authorization

Introduction

Pre-authorization also known as, Authorization Hold, Pre-auth, and a host of other names. For simplicity, this article will refer to it as Pre-authorization.

What is pre-authorization and how does it work?

Using preauthorization is a way to secure payment before the bill is settled. Here's how it generally works:

  1. Your customer wants to make a purchase.

  2. A request for authorization is sent to the cardholder's bank or credit card company.

  3. If the transaction is authorized, the cardholder's bank puts a hold on the amount requested. This hold usually lasts between 1-6 days when a card is not present (CNP). If this hold expires the pre authorized funds are released back to the cardholder.

📘

Information

A hold refers to a bank temporarily blocking the funds in the card holder's account. This secures the funds for the seller. When a card payment is the subject of an pre-authorization request, some banks make a temporary entry appear in the account holder's bank account. However this is not always the case, some banks do not do this at all. As long as this transaction is not sent to the bank, money will not be debited from the customer's account. In reality, the pre-authorization request blocks the amount based on the payment card limit.

  1. At some point between 1-6 days after the pre-authorization you should submit the transaction for settlement with the card holder's bank.

  2. The card holder's bank releases the hold and the final transaction cost is settled. The funds are then transferred to Lemonway.

What are the benefits of pre-authorization?

  • From a seller’s point of view, the funds are secured. If you are an online marketplace orders can be made to third parties. For example, you may not physically hold stock, but purchase stock when sales are made.

  • Your customers are happy because they do not have to pay for the product or service until they have received it.

What happens if the pre-authorization hold time expires?

If the hold expires you will need to contact your customer again to perform another pre-authorization. This can lead to further delays and unsatisfied customers, it is best to avoid this if possible.

When using the Lemonway API you will have to call POST /moneyins/card/webinit again and specify the captureDelayedDays time in the body.

To avoid such scenario, ensure that you have set yourself enough time (within 6 days) to be able to deliver the product or service to your customer. This can be difficult if you are relying on 3rd party suppliers. If you think that the pre-authorization hold time is too short, it’s better to offer an alternative payment method, for example Pay by Bank.

How do I use pre-authorization with Lemonway's API?

  1. If you want to set up a pre-authorization using the Lemonway API you must first initiate a Web payment. The request body indicates the number for captureDelayedDays required, a number between 1 and 6 days to have a guaranteed payment.

  2. To validate the pre-authorization and capture funds, you need to call PUT /moneyins/{transactionid}/validate before 6 days. If the capture is a success, then the original transaction status switches to Success.

🚧

Important

You can only capture a pre-authorization once. So if you initiate a pre-authorization of 100€, you need to capture the entire amount. You cannot capture 50€ on two occasions.

{
  "returnUrl": "https://www.yoursite.com/thankyou.php",
  "errorUrl": "https://www.yoursite.com/oops.php",
  "cancelUrl": "https://www.yoursite.com/seeYouNextTime.php",
  "registerCard": false,
  "captureDelayedDays": 6,
  "moneyInNature": 0,
  "riskAnalysis": {
    "billingAddress": {
      "city": "Paris",
      "country": "FRA",
      "addressAdditional1": "5 Avenue Anatole France",
      "addressAdditional2": "Etage 2",
      "zipCode": "75007"
    },
    "holder": {
      "firstName": "Eiffel",
      "lastName": "Tower",
      "email": "[email protected]",
      "phone": "+33100000000",
      "mobile": "+33600000000",
      "workPhone": "+33100000000"
    },
    "deliveryAddress": {
      "city": "Paris",
      "Country": "FRA",
      "addressAdditional1": "5 Avenue Anatole France",
      "addressAdditional2": "Etage 2",
      "zipCode": "75007"
    },
    "deliveryAdditionalInfo": {
      "contact": {
        "email": "[email protected]"
      },
      "numberOfItemsBasket": "100",
      "addressDeliveryBillingMatchIndicator": "true",
      "deliveryAddressCreationDate": "2021/05/24",
      "estimatedDeliveryDelay": "3",
      "deliveryMode": "Overseas shipping"
    },
    "customerAccountInfo": {
      "customerAccountId": "1234",
      "numberOfPurchase180Days": "10",
      "numberOfTransactionYear": "1000",
      "customerAccountCreationDate": "2021/05/20",
      "numberOfAttemptsAddCard24Hours": "10",
      "suspiciousActivityIndicator": "false",
      "numberOfTransaction24Hours": "1",
      "customerAccountChangeDate": "2021/05/21",
      "passwordChangeDate": "2021/05/20",
      "addPaymentMeanDate": "2021/05/24"
    },
    "authentication": {
      "merchantCustomerAuthentMethod": "FEDERATEDID",
      "merchantCustomerAuthentDateTime": "2021/05/24 06:00:00"
    }
  },
  "reference": "Dze8778",
  "accountId": "33612345678",
  "totalAmount": 1500,
  "commissionAmount": 100,
  "comment": "Order number 2457765AX2",
  "autoCommission": false
}

Did this page help you?