Preauthorisation is card/Customer Wallet check for the availability of funds before the trip and freeze of the preauthorised funds till the end of the trip. It helps companies to minimize revenue loss:
-on card trips with rejected payment due to insufficient funds
-on Customer wallet trips with insufficient wallet funds
Default preauthorisation equals trip estimation +25%.
Let us review several scenarios:
Case 1
Conditions:
preauthorisation is ON
a card is added to the app
card is NOT selected as payment method for the service
Result:
at the stage when a client places the order, the card does NOT get verified for the availability of funds, and, hence, preauthorisation does not work.
Case 2
Conditions:
preauthorisation is ON
card is added to the app
card is selected as payment method for the service
Result:
at the stage when a client places the order, the card gets verified for the availability of funds:
In case the funds on the card are insufficient and the payment method is “Automatically charge client’s card”, the order is lost on both driver and customer apps.
If the funds on the card are insufficient and the payment method is “Credit & debit cards” or “Credit & debit cards” + corporate account/cash/terminal/third party systems payment methods, no funds are preauthorised, but the order goes through to drivers. This is as the customer still has alternatives to pay for the trip: another card (simple charge) or allowed payment method.
If the funds on the card are sufficient the sum gets preauthorised/frozen till the end of the ride.
Case 3
Conditions:
preauthorisation is ON
Customer Wallet is enabled for company and activated in the app
Customer Wallet selected as payment method for the service
Result:
at the stage when a driver accepts the order Customer Wallet gets verified for the availability of funds:
In case the funds on the Customer Wallet are insufficient the order is lost on both driver and customer apps.
If the funds on the Customer Wallet are sufficient the sum gets preauthorised/frozen till the end of the ride.
At the end of a ride with preauthorisation the scenario can be as follows:
if the final trip cost is less or equals the preauthorised sum, the charge for the trip is made from it and the excess value gets released back to credit card/Customer Wallet.
if the final trip cost is higher than the authorised funds:
-for credit cards: we void the initial preauthorisation and make a new charge attempt.
a. in case the transaction fails due to insufficient funds, the order remains unpaid.
b. in case the second charge transaction is successful, the order is paid.
NB: The release of the excess/initially preauthorised funds depends on the card issuing bank's policies. It ranges from instant to a couple of weeks.
-for Customer wallet: we charge the initially preauthorised funds, the unpaid sum is put on the Customer wallet.
Preauthorisation sum:
Preauthorisation sum for regular services
TIME + MILEAGE
1. Preauthorization Amount for trips with pick-up + drop-off (if no fixed cost is enabled) = the greater amount out of the two values below:
a.Trip estimation x 1.25( 25%)
b.Min default trip estimation (10 min + 5 km on the ride)
TIME OR MILEAGE
2. Preauthorization Amount for trips with pick-up + drop-off (if no fixed cost is enabled) = the greater amount out of the two values below:
a.Trip estimation x 1.25( 25%)
b. 0.2 x 10min + 5km (**Min default trip estimation)
3. If a client specifies just pick-up, the system estimates the trip as per taximeter values of 10 min + 5 km on a ride (+ flag down fee).
4. When "fixed cost" is enabled no extra 25 % are added.
5. For fixed rate zones trips no extra 25 % are added.
2.Preauthorisation sum for hourly services
a) if the drop-off address is specified, the cost will be calculated based on the estimated time of arrival (for ex 2 hours);
b) if there is no drop-off, the cost of one hour will be pre-authorised;
c) if the minimum cost in service settings is higher than the cost of one hour, it will be used as a pre-authorisation amount instead;
d) 25% is not added to the pre-authorised amount for hourly rates.
Preauthorisation works for "disabled order cost" calculation.
The sum that is being preauthorised is either trip estimate or trip minimum. At the end of the trip the grand total cost charge includes any other fees if available. It can be larger or smaller than the preauthorised sum.
Preauthorisation timeline for preorders
Card funds preauthorisation can expire. The expiration timeline is set by the card issuing banks, this has nothing to do with our side. In fact, preauthorisation is the mechanism of "freezing" the funds on the card making them unavailable. However, if the funds are not charged within the period the preauthorisation is valid for, the sum gets unfrozen. Generally, the preauthorisation timeline is up to 2 weeks, but can be shorter, depending on a bank's regulations. Hence, it is tricky with preorders, especially if the have a pick-up date somewhere far in the future.