Card preauthorization allows a merchant to preauthorize a specific amount to be paid by a customer. Once preauthorized successfully, a hold is put on the amount specified and left for the merchant to capture that amount at a later time or date.
Merchants can perform any of the following actions after preauthorizing:
Capture: This allows a merchant to capture or collect the preauthorized funds from the customer i.e. after value or service has been given to the customer a merchant would capture the preauthorized amount.
Void: This allows the merchant to release the hold on the funds i.e. if value was not given for the service, the merchant would typically be required to void the transaction
Refund: This allows the merchant to refund a captured amount.
Once an amount is preauthorized on a card and not captured within Seven (7) working days, the hold on the funds is automatically reversed.