Credit card authorization

credit card authorization

Most people have pre-authorized credit card causes a lot of questions. Most people wonder why they have to pay extra for any service, if the money in the account is already frozen.


In fact, blocked amount is not removed from the account, and in the future will again be available to the card holder.

Technically, this service is a temporary blocking of the funds received by the cardholder under the credit agreement. As a rule, the funds are locked at the time of placing the order to any product or service. This money is not deducted from the buyer's account, but simply are not available for removal.

An example of a credit card authorization

Consider authorization mechanism of action of a specific example. Let's say you decide to book a hotel room. After registration on the card account is frozen part of the loan funds, which serve as a guarantee for the hotel. Typically, the amount of such "collateral" is approximately equal to the cost of daily living in the room category booked by us.

If you pay the full cost of the services actually provided, the funds blocked on the credit card account, become accessible again.

But if the value of the services starts to exceed the amount of frozen credit, then, most likely, application procedures will have to re-register, and the amount of blocked funds will increase by the amount of additional services rendered. And, in the same way, after full payment of the invoice for services provided, the funds will be available on the map of its owner.

That is, this function is not a payment operation. In fact, during the authorization request is initiated by an authorization code, and blocked money without debiting the account. It made it, first of all, to check the authenticity of a credit card.

In addition, the pre-authorization helps protect merchants from fraud, guarantees payment for the sold goods (provided services), and eliminates the need to carry out operations associated with the refund.
Thus, the pre-authorization does not obligate you to make additional payments, but is only insured for both the seller and the buyer. The funds blocked in the account, you will be available again after the payment operations.