Understanding Preauthorization PayPal Process

Preauthorization is often used for recurring payments, like subscription services or memberships. To set up preauthorization, you'll need to provide PayPal with the buyer's email address and the amount you plan to charge.

PayPal will then send a notification to the buyer, asking them to confirm the preauthorization. If the buyer accepts, the funds will be reserved in their account, and you can proceed with the transaction.

The pre-authorization process is a common industry-wide practice for e-commerce companies. It's used to ensure that credit/debit cards and PayPal accounts are valid and that the necessary funds exist to charge customers for trial conversions and subscription renewals.

Pre-authorizations are typically done with minimum amounts, such as $1.00 or 1.00 EUR, to enable customers to access free trials and fulfill free orders. This is also used for orders with 100% discounts and those with 0 prices set using "on the fly pricing".

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This process acts as an anti-fraud protection mechanism, helping to prevent unauthorized transactions. Authorization requests between the 2Checkout system and the payment gateway or PayPal don't result in money being withdrawn from customer accounts.

The pre-authorization process doesn't actually charge the customer's account, it just validates the card information. This means that customers won't be charged unless they actually complete a purchase or trial conversion.

You can capture less than or the full original authorized amount for any payment type.

A capture is essentially a request to PayPal to transfer the authorized funds to the merchant's account. However, this doesn't mean the funds will be sent immediately. The merchant has some flexibility when it comes to capturing authorized payments.

You can complete partial captures during a single authorization period. This means you can capture a portion of the authorized amount, and then capture the remaining amount later.

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For PayPal payment authorizations, you must enable this feature on your PayPal account. This allows you to capture payments in a way that's specific to PayPal.

There's a limit to how much you can capture. You can capture up to 115% of or $75 USD more than the original authorized amount, whichever is less.

Here's a quick summary of the capture rules:

Authorization and capture is a powerful tool that allows you to delay fund capture, which can be a lifesaver for merchants with delayed order fulfillment processes.

You can authorize fund availability and delay fund capture for up to 29 days, giving you plenty of time to process orders.

An authorization places a hold on the funds and is valid for 29 days, during which you can issue multiple re-authorizations after the honor period expires.

You can re-authorize up to 10 times within the 29-day authorization period, each generating a new Authorization ID and restarting the honor period.

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Here's a breakdown of the authorization and capture process:

You can capture less than or the full original authorized amount, and you can also capture up to 115% of or $75 USD more than the original authorized amount, whichever is less.

For PayPal payment authorizations, you must enable the feature to complete partial captures during a single authorization period.

PayPal's authorization period is 29 days, during which you can capture, void, or reauthorize funds.

A successful authorization has a three-day honor period, after which you can still issue re-authorizations to restart the honor period.

You can reauthorize basic authorizations for up to 115% of the originally authorized amount or an increase of $75 USD, whichever is lesser.

The honor period is a three-day window after a successful authorization where you can capture the funds.

This period is crucial because the success of the capture is subject to risk and availability of funds on the authorized funding instrument.

You can issue multiple re-authorizations after the honor period expires, which generates a new authorization ID and restarts the honor period.

A re-authorization on the 27th day of the authorization only gives you two days of honor period.

Basic authorizations place a customer's funds on hold for up to 29 days. During this time, you can capture, void, or reauthorize the funds.

You can reauthorize a basic authorization for up to 115% of the originally authorized amount or an increase of $75 USD, whichever is the lesser amount.

Basic authorizations can be captured and voided through the APIs or by logging in to your PayPal account and using the web interface.

You can make up to 10 basic authorizations for each Order, and authorizations created from an order expire after three days.

An order is valid for 29 days, and within this period, you can request one or many authorizations to ensure the availability of funds.

Creating a PayPal Order indicates that the buyer has consented to the purchase but does not place the funds on hold. It's essential to create an authorization instead of capturing an Order directly, as authorizations created from an order expire after three days.

You can make up to 10 basic authorizations for each Order, and if your account allows only a limited number of authorizations per Order, you can contact PayPal Customer Support to configure your account to allow up to 99 basic authorizations for each Order.

An order is valid for 29 days, and within this period, you can request one or many authorizations to ensure the availability of funds. The sum of the total open authorizations can’t exceed 115% or $75 (whichever is less) of the amount provided to PayPal when the order was created.

Pre-authorizations are used to ensure that credit/debit cards and PayPal accounts are valid and that the necessary funds exist to charge customers for trial conversions and subscription renewals. This is a common industry-wide practice for e-commerce companies.

Authorization requests between the 2Checkout system and the payment gateway or PayPal used to validate your card information do not result in money being withdrawn from customer accounts.

Preauthorization with PayPal allows you to authorize fund availability but delay fund capture, which is useful for merchants with delayed order fulfillment processes.

You can use Authorize and Capture with other PayPal payment options, such as Express Checkout, Website Payments Pro, and PayPal Payments Standard buttons.

An authorization places a hold on the funds and is valid for 29 days.

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Authorize and capture is a useful feature for merchants with delayed order fulfillment processes, allowing them to authorize fund availability but delay fund capture.

You can change the original authorization amount if the order changes due to shipping, taxes, or gratuity.

Authorize and capture can be used with other PayPal payment options, such as Express Checkout, Website Payments Pro, and PayPal Payments Standard buttons.

An authorization places a hold on the funds and is valid for 29 days.

PayPal recommends capturing funds within the three-day honor period after a successful authorization.

The honor period is subject to risk and availability of funds on the authorized funding instrument.

Here's a breakdown of the authorization and capture process:

You can capture less than or the full original authorized amount, or up to 115% of or $75 USD more than the original authorized amount, whichever is less.

For PayPal payment authorizations, you must enable the feature of completing partial captures on your PayPal account.

You can't close accounts that have authorized but not yet captured payments, and customers and merchants can't either.

Authorizing payments for orders confirms the availability of funds but doesn't place the funds on hold.

For merchants in Japan, an authorization places a hold on the funds using Advanced Credit and Debit Card payments and is valid for 60 days.

Alibaba Cloud supports various online payment methods, but the availability of these methods depends on your country or region of registration. The supported payment methods vary across different regions.

In the USA, all major bank cards such as Visa, Mastercard, and American Express are supported. Additionally, PayPal is also available as a payment option.

In Europe, all the mentioned bank cards are supported, except for American Express. The region includes countries such as the UK, Germany, Italy, and France.

In Malaysia, customers can use Visa, Mastercard, and American Express for online payments. However, American Express is not supported in other regions.

In India, customers who registered after July 29, 2019, can use bank cards, Mastercard, and Paytm for online payments. However, customers who registered before this date belong to Other Countries/Regions.

Other Countries/Regions include China (Hong Kong), China (Taiwan), Singapore, Indonesia, Japan, South Korea, Australia, Middle East, Latin America, and African countries. In this region, bank cards such as Visa, Mastercard, and American Express are supported, except for Mastercard in India and American Express in Malaysia.

Here is a summary of the supported online payment methods by region:

Enterprise customers can also open a credit line in Alibaba Cloud, allowing them to spend within their credit limit.