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Merchants have learned to abuse (use) that difference between an auth and a capture. Sometimes you will get auths that differ from the actual capture. Some ex

by kyrra 11y ago

Merchants have learned to abuse (use) that difference between an auth and a capture. Sometimes you will get auths that differ from the actual capture. Some examples (all US centered): 1) Restaurants will auth your credit card for the bill total, but will capture for bill + tip. So pre-settled totals will not include tip. 2) Gas stations auth your card when you scan (before the pump turns on). They auth for $100, but will then capture for whatever amount you spend. 3) When you add a card to certain merchants (like the Google Play store), they will do a 1 cent auth to make sure the card/address/expiration are valid. But then they never issue the capture and the event disappears.

tommorris 11y ago
Transport for London really take it to the limit with contactless. You scan a contactless card and they do a £1 authorisation the first time you use it (on Amex at least, I've heard it is different on other card networks). They then total up the amount you use it and start settling it when you reach a certain point. This is because there are quite complex rules: 1. If you don't "tap out" of a tube/train journey, they charge you the maximum fare. 2. They don't know at authentication time where you are going. You could be doing a journey within an outer zone which would only cost £1.50 or you could be doing a journey all the way from zone 6 into zone 1 which would be, say, £5.60 3. Different fares apply peak and off-peak 4. There's a "price cap" that applies - so you can't go spend more in one day than the cost of an unlimited use one day travelcard that covers all the journeys, and you can't spend more in one week than the cost of an unlimited one week travelcard. In practice what happens is you just keep using contactless and the system settles the payments up right pretty much all of the time. They've done some clever thinking to make it work. The downside: now that people have the same card in multiple 'forms' (e.g. as an actual card, and as a virtual card on Apple Pay or whatever), you can't switch between then without breaking this complex set of rules in some ways. You can register an online account and all your contactless cards to it, but you can't then keep switching between cards (or between cards and virtual cards) without things breaking. You pretty much have to just choose one payment method (either a card or Apple Pay) and stick with it.
- X-Istence 11y ago
  > 4. There's a "price cap" that applies - so you can't go spend more in one day than the cost of an unlimited use one day travelcard that covers all the journeys, and you can't spend more in one week than the cost of an unlimited one week travelcard. That is really nice of them, I know a lot of companies that'd be like "cha-ching free money".
  - tommorris 11y ago
    Transport for London is a publicly-owned non-profit. They tend to make decisions that are in the long term interest of the city's transport users rather than improving quarterly profits...
sophacles 11y ago
I'm not so sure that these are abuse. For instance, (2) is effectively an escrow service, hotels and a few other types of service use this quite effectively. I honestly wish restaurants would also just auth an extra 20% on my purchase in escrow and settle the actual tip amount later, and similarly bar tabs. In (3) its also sort of an escrow service, but not really. Similarly, this is why merchant processors are required for a lot of companies to do business over credit networks. They too hold money for some N days before it is released to a merchant (after clearing) - as escrow to the card issuers in the case of chargebacks and other fraud.

by kyrra 11y ago

tommorris 11y ago

Transport for London really take it to the limit with contactless. You scan a contactless card and they do a £1 authorisation the first time you use it (on Amex at least, I've heard it is different on other card networks). They then total up the amount you use it and start settling it when you reach a certain point. This is because there are quite complex rules: 1. If you don't "tap out" of a tube/train journey, they charge you the maximum fare. 2. They don't know at authentication time where you are going. You could be doing a journey within an outer zone which would only cost £1.50 or you could be doing a journey all the way from zone 6 into zone 1 which would be, say, £5.60 3. Different fares apply peak and off-peak 4. There's a "price cap" that applies - so you can't go spend more in one day than the cost of an unlimited use one day travelcard that covers all the journeys, and you can't spend more in one week than the cost of an unlimited one week travelcard. In practice what happens is you just keep using contactless and the system settles the payments up right pretty much all of the time. They've done some clever thinking to make it work. The downside: now that people have the same card in multiple 'forms' (e.g. as an actual card, and as a virtual card on Apple Pay or whatever), you can't switch between then without breaking this complex set of rules in some ways. You can register an online account and all your contactless cards to it, but you can't then keep switching between cards (or between cards and virtual cards) without things breaking. You pretty much have to just choose one payment method (either a card or Apple Pay) and stick with it.

X-Istence 11y ago
> 4. There's a "price cap" that applies - so you can't go spend more in one day than the cost of an unlimited use one day travelcard that covers all the journeys, and you can't spend more in one week than the cost of an unlimited one week travelcard. That is really nice of them, I know a lot of companies that'd be like "cha-ching free money".
- tommorris 11y ago
  Transport for London is a publicly-owned non-profit. They tend to make decisions that are in the long term interest of the city's transport users rather than improving quarterly profits...

sophacles 11y ago

I'm not so sure that these are abuse. For instance, (2) is effectively an escrow service, hotels and a few other types of service use this quite effectively. I honestly wish restaurants would also just auth an extra 20% on my purchase in escrow and settle the actual tip amount later, and similarly bar tabs. In (3) its also sort of an escrow service, but not really. Similarly, this is why merchant processors are required for a lot of companies to do business over credit networks. They too hold money for some N days before it is released to a merchant (after clearing) - as escrow to the card issuers in the case of chargebacks and other fraud.