What is a Pre-authorisation?
A Pre-authorisation (Pre-auth) is a temporary authorisation placed on a guests’ credit card to reserve funds for a future payment.
How much money is held?
The money held by the Pre-authorisation is solely dependent on the Pre-authorisation rules set at the hotel and will typically include the accommodation rate as well as a smaller amount for incidental charges (which are typically later released at the discretion of the hotel).
Can I use my Debit Card?
We strongly encourage guests and hotels NOT to process Pre-authorisation’s on Debit Cards as the issuing bank can take anywhere up to 28 business days to release your funds.
What about using Apple Pay or my phone/watch?
Apple Pay, Android Pay and any other contactless payment method processed using a smart watch or phone fall into the same category as Debit Cards and therefore are not recommended to be used when processing Pre-authorisation’s.
What method of payment should I use?
The recommended method of payment to be presented for a Pre-authorisation is a plain old Credit Card. The time to wait until the temporary holding of funds is released is typically a lot less than Debit Cards (most issuers release within 7-14 days).
What happens to the Pre-authorisation?
In an integrated environment, a Pre-authorisation is either a) Completed/Charged or b) Released back to the cardholder. A Pre-authorisation can only be Completed/Charged for less than 15% of the original transaction.
For example, if the charge is greater than 15%, an additional ‘Top-up’ Pre-authorisation is processed to make up the difference in the amount, before the original Pre-authorisation is Completed/Charged. The second ‘Top-up’ Pre-authorisation is then released back to the cardholder, however sometimes until the second Pre-authorisation is released by the issuer, this can sometimes appear to be a “double charge” when in actual fact it is the second Pre-authorisation waiting to be released by the cardholders issuing bank.
What can be done to release a Pre-auth?
Whilst the releasing of the funds is at the mercy of the cardholders issuing bank, a hotel can send off a ‘Pre-auth Release’ message to the cardholders issuing bank via the PMS/integrated solution or by utilising Currency Select’s Merchant Portal.
What about $1 Pre-authorisation’s?
We highly recommend against processing $1 Pre-authorisation’s regardless of the reason, as this will almost always trigger the above ‘Top-up’ Pre-authorisation process and can ultimately result in Chargeback/Dispute related matters.
