What is a Pre-authorization ?

A pre-authorization is used in merchants where the final transaction amount is not yet known.

Pre-authorizations are typically used in the following scenarios:

• Hotels ; as a guest checks in but the full cost of the stay may not be known until checkout)
• Car rentals ; where the final amount may include additional milage or fuel charges
• Petrol stations ; where an authorisation check is required prior to starting to dispense fuel.
• etc

When CLOWD9 receives a pe-authorization request from a network we will follow specific steps to ensure accurate processing, compliance with network standards and a positive cardholder experience.

The sequence of steps is :

1. Validate Request

Perform standard authorization checks including:

• Card/Account Status Checks; including velocity checks, transaction monitoring etc
• Authorization technical checks; including CVV, AVS 3D Secure etc
• Verify available balance is sufficient to cover the estimated authorization amount.
• etc

2. Decision: Approve or Decline

• If the transaction passes all checks:

  • Approve

• If failed:

  • Decline with a meaningful reason code

3. If Approved, Update Available Balance

• reduce available balance by the amount of the pre-authorization.

4. Manage subsequent financially related events

After the pre-authorization there may be subsequent messages that are finacially related to the pre-authorzation such as:

• clearing
• reversal (partial or full)
• incremental authorization
• etc