Authorization is part of every transaction with a debit card and occurs within a fraction of a second when the transaction is performed on your payment terminal or online payment page.

The authorization of a debit card is a control mechanism to ensure that there is sufficient credit available on the payment account. The transaction amount is temporarily held as a reservation after approval from Mastercard/Maestro.

Mastercard/Maestro distinguishes between two types of authorizations:

Pre-authorization: This method is often used in the travel and rental industry and in e-commerce. The cardholder provides their credit card as 'collateral', after which the merchant reserves an amount on the debit card. The debit card is not immediately charged, but the amount is temporarily reserved. The final transaction often takes place when the products/services have actually been consumed.

Examples of pre-authorizations:

  • A customer needs a hotel room in three weeks and makes a reservation for it.

  • For renting a car, a deposit is reserved on the credit card.

  • For purchasing products in an online store where shipping costs may vary, a reservation is made via the credit card.

Final authorization: This concerns a 'normal' transaction with a debit card. The authorization (reservation) and transaction take place at the same time, and the transaction is completed immediately. A final authorization is automatically done on the payment terminal or on the online payment page but can also be requested over the phone. A final authorization is used when a transaction amount is known in advance and will not change.

An example of this is the purchase of a pair of shoes that is directly paid for with a credit card in a store or online shop.

New rules regarding final authorizations:

The costs that Mastercard/Maestro passes on regarding the authorization process relate to final authorizations. The new rules have been introduced to ensure that reservations of Mastercard/Maestro cardholders are not held longer than necessary. Cardholders are thus not unnecessarily restricted in their spending.

The following new rules apply:

  • Uncompleted final authorizations may be held for a maximum of 4 working days and must be converted into a transaction within 4 days.

  • The amount and currency of the final authorization must be equal to the transaction amount.

  • Cancellation of final authorizations is not allowed.

For authorizations that do not meet the above conditions, additional charges apply. The additional charges amount to 0.25% of the authorization amount with a minimum of €0.03.

Example calculation:

A transaction of €100 is not authorized according to Mastercard/Maestro's new guidelines, meaning an additional amount of €0.25 (0.25% x €100) will be charged.

What EMS advises you:

Mastercard/Maestro identifies all 'non-reservations' (read pre-authorizations) as final authorizations. To minimize the risk of additional costs, we advise you to consider the following:

For offline payments (payments via payment terminal):

  • Ensure that the software of your payment terminal is always up to date. In case of doubt, contact your payment terminal supplier.

  • Clearly ask the cardholder in advance what the preferred payment method is; aborted transactions are often authorized but not converted into a transaction.

  • If an already authorized transaction is canceled, process the entire authorized amount as a refund.

  • Ensure that the connection of your payment terminal is good (regularly check cables, internet connections).

  • Ensure that the cardholder does not remove the card from the payment terminal during the payment.

For online payments:

  • When ordering and paying from abroad, ensure that the amount and currency of the final authorization are the same as those in the transaction amount.

  • Be clear to your customers. If they reserve a ticket or hotel via the internet with you, clearly communicate that the booking is not binding and cannot be canceled. Include this in your Terms and Conditions, in the terms of ordering and delivery, or in the frequently asked questions on your website. Provide a clear order button stating that it is an order with payment obligation.

  • If you sell products, make sure to clearly state on your website what the conditions are for ordering through your website. Explain that the order and payment cannot be canceled but that the buyer will get their money back if they return the order within 14 days.

  • Ensure that you finalize a payment within 4 days after the final authorization. If a payment is canceled, process the entire authorized transaction amount as a refund.

  • Explain to your employees what the new rules of Mastercard and Maestro are to prevent inconvenience regarding your customers' payments.

You can cancel an authorization within 5 working days using the payment terminal.

If that doesn't work, you can contact customer service.

Depending on the card issuer, they may be able to assist.

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