Card Payments

Authorisation, Capture and Pre-Authorisation Explained

Learn the difference between authorising and capturing a card payment, how pre-authorisation holds work, and when reserved funds are released.

A card payment is not a single event. It happens in two distinct steps: authorisation, where the issuing bank approves the transaction and reserves the funds, and capture, where the merchant confirms the amount to be taken and the transaction is submitted for settlement. Most everyday payments combine the two automatically, but keeping them separate unlocks useful patterns such as pre-authorisation holds.

Understanding the difference explains some things customers often ask about, such as why a "pending" amount appears on their statement before it becomes a final transaction, or why a cancelled hold takes days to disappear.

What Is Authorisation?

Authorisation is the real-time approval of a transaction. The request travels from the merchant through the acquirer and card network to the issuing bank, which checks that the card is valid, funds or credit are available and the transaction passes fraud screening.

When the issuer approves:

The amount is reserved against the cardholder's available balance or credit limit.
The cardholder sees a pending transaction on their account.
No money has moved yet; the merchant has an approval, not a payment.

What Is Capture?

Capture is the merchant's instruction to finalise the authorised transaction. Captured transactions are submitted into clearing and settlement, after which the money is actually transferred to the acquirer and paid to the merchant.

Immediate (auto) capture – authorisation and capture happen together. This is the default for retail purchases and most online checkouts.
Delayed capture – the merchant authorises first and captures later, for example when goods are shipped. Capture can be for the full authorised amount or a smaller amount.

An authorisation that is never captured simply expires, and the issuer releases the reserved funds back to the cardholder.

What Is a Pre-Authorisation?

A pre-authorisation (pre-auth) is an authorisation placed deliberately as a hold, with capture intended only later, often for a different amount. Common South African examples:

Hotels and guesthouses – a hold at check-in to cover incidentals, with the final bill captured at check-out.
Car rental – a deposit hold released after the vehicle is returned undamaged.
Fuel stations (automated pumps) – a hold before pumping, captured for the actual fuel value.
E-commerce – a hold at order time, captured only when stock is confirmed and shipped.

Points to remember:

A pre-auth reduces the customer's available balance immediately, even though no money has moved. On a debit card this locks up real cash, which is why some customers prefer to present a credit card for holds.
If the hold is cancelled (reversed) or expires without capture, the issuer releases the funds. Release is not always instant; depending on the issuing bank it can take several days for the pending amount to disappear from the customer's account.
Card scheme rules limit how long an authorisation remains valid before it must be captured or released; the allowed window differs by merchant category.

How Do Authorisation, Capture and Pre-Authorisation Fit Together?

Step	What happens	Money moves?	Customer sees
Authorisation	Issuer approves and reserves the amount	No	Pending transaction
Capture	Merchant finalises the amount for settlement	Yes, at settlement	Final transaction
Pre-authorisation	Deliberate hold, captured later or released	Only if captured	Pending hold, then final amount or release

Practical Tips for Merchants

Only capture what you are entitled to; capturing more than the authorised amount is generally not allowed.
Release holds you no longer need rather than letting them expire, so customers get their funds back sooner.
If you cancel an uncaptured authorisation, that is a reversal or void, not a refund; see Card Refunds, Reversals and Voids.
Reconcile captures against authorisations so unmatched holds are picked up quickly. Webhooks help here; see Webhooks and Callbacks.

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