What's an “authorization” and can I cancel it?
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Understanding Authorizations
In the realm of online payments, authorizations play a significant role. An authorization is a process in which a merchant requests approval from the customer's payment provider to charge a specific amount for a purchase. This "hold" on the funds ensures that the customer has sufficient funds to complete the transaction before the actual purchase takes place.
How Authorizations Work
When you initiate a purchase, the merchant sends a request to your payment provider to authorize the transaction. During this process, your payment provider verifies your account and sets aside the necessary funds, which appear as a pending transaction. The hold on the funds ensures that the merchant will receive payment once the purchase is finalized.
Types of Authorizations
Authorizations can be classified into two main types: pre-authorizations and post-authorizations.
1. Pre-Authorizations
Pre-authorizations are commonly used in scenarios where the final transaction amount is uncertain. For example, when booking a hotel room, the hotel may request a pre-authorization for the total cost including potential add-ons or damages. This ensures that your funds are temporarily held until the final charges are determined.
2. Post-Authorizations
Post-authorizations, on the other hand, are used when the transaction amount is known in advance. Common examples include online shopping or purchasing tickets. The amount is initially authorized, the purchase takes place, and the payment provider releases the funds to the merchant.
Can I Cancel an Authorization?
Yes, you can cancel an authorization under certain circumstances. The ability to cancel an authorization depends on the policies and processes of your payment provider and the merchant you are dealing with. It is crucial to reach out to the appropriate parties involved to understand the cancellation procedure.
Cancellation Process
If you wish to cancel an authorization, follow these general steps:
- Contact the Merchant: Reach out to the merchant for assistance. Provide them with relevant details, such as the authorization reference number, your purchase details, and any other requested information.
- Payment Provider's Assistance: If the merchant is unable to cancel the authorization, contact your payment provider's customer support. They will guide you through the necessary steps and advise on the next course of action.
- Review Policies: Familiarize yourself with the cancellation policies of your payment provider and the merchant. Understanding these policies will help you navigate the process more effectively.
- Confirm Cancellation: Once the cancellation is successfully processed, ensure that the authorization is canceled from your account. This step helps avoid any unnecessary charges in the future.
Conclusion
In summary, authorizations are an integral part of online payment systems. They ensure that merchants receive payment for goods and services while protecting consumers from unauthorized charges. Understanding the types of authorizations and the cancellation process can help you navigate online transactions more confidently. If you have any questions or concerns regarding an authorization, always reach out to the merchant or your payment provider for assistance.
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