Pre-authorisation charges have quietly become one of the most practical tools for businesses handling payments before delivery or completion. Whether you run a global marketplace, a travel platform, or a subscription-based service, the ability to temporarily hold funds before committing the transaction provides a useful buffer. Pre-authorisation isn't just about protecting your balance sheet. It also plays a role in building trust with your customers.
Let's walk through how pre-authorisations work, why they matter, and how you can apply them thoughtfully to protect revenue without hurting the customer experience.
Holding funds before confirming a transaction might sound cautious. But that caution has upside.
When you initiate a pre-authorisation, you temporarily reserve a specific amount on the customer's card – without taking the money out. This acts as a guarantee. It confirms the customer's payment method is valid and has sufficient funds.
Why this matters:
For businesses dealing with high-value items, fluctuating costs (like hotel incidentals), or subscription renewals, pre-authorisation prevents revenue leakage before it starts.
If you're new to pre-authorisation, here's how to approach it without adding unnecessary friction:
Done well, pre-authorisation becomes part of your operational rhythm, not an occasional tactic.
If you're a finance leader, here are the questions to ask before adopting or expanding pre-authorisation:
These questions frame pre-authorisation not as a technical feature but as a business lever.
Misunderstandings about pre-authorisation can cause hesitation—both internally and for your customers. Here's what to clear up:
|
Misconception |
The reality |
|
"It charges the customer twice" |
No. It's a hold. If the transaction proceeds, the hold is captured. If not, it's released. |
|
"Only works for credit cards" |
Debit cards and digital wallets can support pre-auth too. |
|
"It's confusing for customers" |
Not if you explain it clearly. Most people are familiar with it from hotels or rentals. |
|
"There's no added value" |
It reduces fraud, ensures available funds, and improves payment certainty. |
Every dispute costs time and potentially revenue. Pre-authorisation gives merchants an edge.
Pre-authorisation isn't a silver bullet, but it tightens the loop around common fraud scenarios.
Strategies that make pre-authorisation work
If you're going to use it, make it work for you – not just your risk team. Consider these best practices:
Holding funds before a purchase can feel intrusive if not handled right. But it can also reassure customers that you're running a responsible operation.
Transparency isn't optional – it's what builds loyalty.
Whether you're running a marketplace or managing bookings for a travel platform, pre-authorisation should be easy to manage.
Here's a simplified checklist:
You don't need a full risk team to get this right. Just a process that reflects how your business actually operates.
Payments work best when they're predictable. Pre-authorisation contributes to that by:
With the right payment provider, pre-authorisation becomes a quiet but consistent contributor to fewer declines, better customer experience, and stronger cash flow.
Pre-authorisation isn't flashy. It's not the newest feature in payments. But it solves real problems.
If you're looking to improve payment certainty, reduce operational hassle, and provide a better experience for your customers – pre-authorisation is worth serious consideration.
And while Antom supports pre-authorisation as part of its broader payments toolkit, this is a strategy any business can adopt, regardless of the provider they use.