Pre-authorization Definition.

An authorization that reserves funds (a “hold”) without immediate capture, used by hotels, rental companies, and gas stations: the estimated amount ties up the cardholder’s available limit until the transaction is completed for the final amount or the hold expires. The card networks set how long it can last (from a few days to 30 days depending on the MCC) and require unused funds to be released. A pre-authorization that is never closed out is a classic source of cardholder disputes.

See also

→ Authorization→ Capture

Where this term appears

GuidePayment cardsCourseAccepting payments in AfricaCourseAccepting payments in Poland and Central EuropeCourseA CB card transaction, end to endCourseOpen banking and account-to-account (A2A) paymentsCoursePCI DSS and payment data securityCourseAccepting cards in store: POS terminals from A to ZCoursePayments vocabulary in one hourCourseTraveling and paying abroad

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