What is an authorization hold?
An authorization hold is done by a payment provider to make the following checks:
- Validate the payment method being used (if it’s active and if all information is correctly entered)
- Check funds availability (if the card can be used to make a purchase)
- Bank/issuer approval (if the bank will allow to process a payment)
With Cleeng's Merchant solution, an authorization hold is used in the following scenarios:
- Free Trial
Some payment methods do not support zero-value transactions. So when a free trial is involved, Cleeng puts an authorization hold of 1 USD/EUR and immediately cancels it.
- Payment method update
Depending on what a payment method supports, Cleeng might execute an authorization hold of 1 USD/EUR to validate the details of the new payment method. After the entry of the payment method and validation, this is reversed immediately.
For effective dunning notifications and charges of recurring transactions, with Merchant the first authorization hold attempt is recommended to start 72 hours before the access expiration date.
If the transaction is authorized by the bank, the amount will be held until the actual renewal date.
Note: If a customer stops the renewal before the actual renewal date, the authorization hold is canceled immediately.