Pre-Authorize-Capture 2 step Credit Card process.
This transaction type is typical for Hospitality and Car Rental industries where businesses do not have practical way to get paid after service provided.
Pre-Authorize/Capture is a two step payment:
- Pre-Authorize - your bank takes money from your card and sets it aside waiting for signal from merchant.
- Capture or Refund - merchant asks bank to reverse (Refund) or charge (Capture)
- If merchant does nothing it is reversed (Refunded) after 30 days.
What if customer disagrees with the charge later?
Customer opens bank web site and click dispute button to charge-back credit card - bank refunds money first, then looks at the case to decide.