Pre-Authorization Payments — How It Works – Paystand Help Center

The Process — Two Steps, Authorize Now, Charge Later

Pre-Authorization separates the payment process into two distinct stages. The card is verified and funds are reserved at checkout; the actual charge only occurs when your team is ready to collect.

Step 1 — Authorization: Reserve the funds Paystand checks that the payer's card has sufficient funds and places a temporary hold. The card is tokenized. A Pre-Authorization record is created in Paystand and linked to the invoice. No charge occurs at this stage.

Step 2 — Capture: Transfer the funds Once your team is ready — order fulfilled, service completed, shipment confirmed — a capture transfers the authorized funds. A payment record is created, your ERP invoice updates to Paid, and the GL is posted.

Payer experience: The payer experience at checkout is identical to a normal credit card payment. The payer sees a confirmation that their payment method has been accepted. They are not charged until your team performs the capture.

Capture Options — Full, Partial, or Multiple

Full Capture Capture the entire authorized amount in one action. The pre-authorization closes and the invoice marks as Paid.

Partial Capture Capture less than the authorized amount — useful when an order ships partially, a line item is cancelled, or the taxable amount changes after checkout.

Multiple Captures Make successive partial captures against a single authorization — ideal for wholesale orders shipping in multiple batches over several days, or service milestones billed incrementally.

Void an Authorization Cancel the authorization before capture. The hold releases immediately — far cheaper than a refund, with no payment record created and no GL impact.

When to Use Pre-Auth

Pre-Auth is designed for businesses where the final charge cannot be confirmed at checkout — whether due to inventory, fulfillment complexity, or post-checkout adjustments.

Authorization Status Lifecycle

Each pre-authorization moves through a defined set of statuses. Understanding these helps your team know when a payment can still be modified.

• Pending — Authorization is in flight at the payment processor
• Authorized — Hold is active. Funds are reserved. No charge yet.
• Partially Captured — One or more partial captures completed. Remaining balance is still available.
• Captured — Fully captured. No remaining balance. Closed.
• Voided — Authorization cancelled. Hold released. No funds moved.
• Expired — Authorization window passed. A new authorization must be created.

Expiration window: Authorizations expire automatically per card network rules — typically 7 days for standard transactions, up to 30 days for certain merchant categories. Once expired, a new authorization must be created.

ERP & GL Behavior

While an active pre-authorization exists on an invoice, Paystand blocks all additional payment attempts against that invoice to prevent duplicate charges. Payment capability is restored once the authorization is fully captured, voided, or expired.

Key Facts

• Voiding an authorization is significantly cheaper and faster than processing a refund — no funds move, the hold simply releases.
• Until capture, no payment record is created and no GL entry is posted. Revenue is not recognized until goods are confirmed delivered.
• You capture the exact amount due after fulfillment — adjust for stock changes, shipping updates, or partial deliveries without requiring a new authorization.

For questions about Pre-Authorization Payments, contact Daniel Salinas at dsalinas@paystand.com paystand.com

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Table of contents

Pre-Authorization Payments — How It Works

• Pre-Authorization Payments — How It Works
• The Process — Two Steps, Authorize Now, Charge Later
• Capture Options — Full, Partial, or Multiple
• When to Use Pre-Auth
• Authorization Status Lifecycle
• ERP & GL Behavior
• Key Facts