Pre-Authorization

What pre-authorization is

A pre-authorization is a card authorization request for an estimated amount. You use it when the final bill is not known yet, such as a hotel stay, car rental, or restaurant tab with a tip. The issuer approves or declines the request and, if approved, reserves the amount on the customer's card.

The pre-authorization is the request and payment step. An Authorization Hold is the effect on the cardholder's available credit or funds. A credit-card hold reduces available credit; a debit-card hold sets aside money in the customer's checking account. The reserved amount is not transferred to your business until you capture the payment.

A pre-authorization secures approval for an estimated amount; the issuer's hold is what temporarily limits the customer's spending power.

How the payment is completed

After you know the final amount, you submit a capture against the approved authorization. If the final bill is lower than the reserved amount, the unused portion is released. If you cancel the sale, release the authorization so the customer is not left waiting for the issuer to remove the hold.

For example, a hotel can authorize an estimated $430 for a stay and incidental expenses, then capture an illustrative $398 after checkout. The customer is charged the final amount, while the remaining $32 is released. Your ability to adjust an authorization or capture a different amount depends on card-network, issuer, and transaction rules.

How pre-authorization affects your costs

A pre-authorization is not a completed sale, but it is not necessarily free. As of 2026, Mastercard Pre-Auth costs 1.25 basis points, or 0.0125%, more than Final Auth. On an illustrative $2,000 authorization, that difference is $0.25. Use Final Auth when you know the amount at checkout, and reserve Pre-Auth for bills that can change.

Captures after an authorization expires can fail or trigger additional network fees. A failed capture can also lead to a missed sale or a dispute if you submit the charge without a valid authorization. There is no single expiration period for every pre-authorization: card type, transaction type, and network rules affect how long it remains valid.

What your customer experiences

A hold commonly lasts about five to seven days. Some issuer holds last up to 14 days, and certain hotel or car-rental holds can last up to 30 days. The issuer controls when the hold disappears, so capturing or releasing the authorization promptly does not guarantee an immediate update to the customer's balance.

An oversized hold ties up more of the customer's spending power than the final bill requires. That is especially disruptive on debit cards, where the hold reduces money available in the checking account. Tell customers the estimated amount and expected release timing before you request approval.

What you can actually change

You control when you request a pre-authorization, how closely its amount matches the expected bill, and how quickly you complete or release it. Those choices affect customer experience and the chance that an approval expires before you capture payment.

• Use Final Auth when the purchase amount is known; use Pre-Auth when the final bill can change.
• Set an estimated amount that reflects the likely final total instead of adding an oversized buffer.
• Capture the final amount or release unused authorization promptly, and track approvals approaching expiration.
• Tell customers the hold amount and explain that their issuer controls when reserved funds or credit become available again.

1. 01
   Choose the right type. Route fixed-price sales through Final Auth and keep Pre-Auth for transactions where the total is still changing.
2. 02
   Track open approvals. Review authorizations that have not been captured and resolve them before they expire.
3. 03
   Explain the hold. Give customers the estimated amount and a realistic release timeframe before placing the authorization.

Frequently asked questions