With card and wearable transactions, first there is an authorization by the issuer which temporarily puts the transaction amount on hold, and then there is a settlement during which the funds are transferred to the merchant's account. If things go wrong during the transaction processing, the merchant may not send a settlement and instead send an authorization cancellation, or may not send us any notification at all.
MuchBetter handles the following types of authorization:
- Final authorization: By authorising a transaction, the card issuer confirms that the card is valid and the available funds on the card are sufficient for this payment to go through. Typically, the funds are captured directly after a successful authorization, leading to a successful charge. There may be cases, however, that the merchant settles the payment later (within 7 days after the card was authorised). If the merchant doesn't confirm the payment within 7 days, the authorization will expire and the funds will be credited back to your wallet.
- Pre-authorization (also: authorization hold): Pre-authorization is used to authorise a card, and the authorised amount is put on a temporary hold. This action is often used by merchants who are unsure of the final amount charged on the card. You may come across it while dealing with hotels, hospitality, car rental services, etc. Example: While renting a hotel room, the merchant authorised your payment for a standard room price but, during your stay, you used extra services (room service, hotel restaurant, etc.). During the check-out, the hotel added all charges to the initial price and settled the final amount. Once this is completed, the hold is removed from your card and the actual final amount is taken. The pre-authorization period may vary depending on the card issuer. At MuchBetter, the authorization hold may last up to 30 days. If the merchant does not settle the payment within 30 days, the hold will be removed and the amount will be available again in your wallet.
As per the above explanation, depending on the authorization type, your funds may not be available either within 7 days or 30 days after the authorization has been actioned. This happens because the merchant did not send us a confirmation of the charge within this period. In this case, you can either contact the merchant to confirm the payment status of your purchase, or you can also contact our support team who will review it for you.