Pre-authorization is a verification process that temporarily places a hold on a specific amount on a card during a payment transaction. It is commonly used in hotel reservations, rental services, and online purchases.
Why Does It Provide Security?
Payment approval is obtained before the service is fulfilled. This means an invalid card or insufficient limit is flagged upfront — protecting the business from financial loss and keeping the process on track.
Why Does It Affect Customer Experience?
When customers know their card is only held — not charged — they feel confident in the process. Once the service is completed, the actual charge is captured, preventing duplicate or incorrect transactions. Transparency drives satisfaction.
