Visa Pre-Authorization Rules Changing?

Will Visa no longer pay if a pre-authorization goes uncharged for 10 days?

[warrisr]

I have heard a rumor that effective Feb 1, 2005 Visa will be changing the way they handle pre-authorizations.

Currently a pre-authorization will be honoured for quite some period of time (providing the customers credit card is still valid and there is credit available on their card), however this will be changed so that if an authorization goes uncharged for more than 10 days, Visa will no longer pay the merchant when the order is finally filled and billed under the original authorization.

Has anyone else heard about this? I have not received any notification about it from Visa or my payment processor and cannot find anything about it on the Visa website.

If this true, this could significantly change how we do business on the web.

Ron

[Corey Bryant]

Actually pre-auths vary from issuing bank to issuing bank. Usually the pre-auth is valid for about 3-5 business days.

-Corey

[mastervisa]

Corey is right, varies bank to bank. I've seen 10 days and 30 days from banks we use. Have heard no rumors or seen any notices about a Feb 1 change in regs.

[warrisr]

I wasn't aware that this varied from bank to bank. Currently my bank gives me 30 days. I have submitted an inquiry to find out if this has changed.

Thanks for the replies!

Ron

[lgn1]

Pre authorizations are good from 5 to 30 days depending on the bank. The most common time frame is 10 days.

As a caveat, banks will generally honor expired pre-authorizations, unless it is for a lot of money, or the credit card has been cancelled.

I usally miss 4 or 5 charges, and don't catch it until year end, which could be 11 months later. I run them through no problem. No reversals on this in 5 years.

I always inform the customer, after this length of time however, as a courtesy, and avoid them thinking it was a double charge.

[warrisr]

I think you are right lgn1.

I got word back from my bank this morning that they are not aware of any changes. I too have put through transactions as long as 90 days past the pre-authorization date and in the past 2 years have never had a problem.

The way the rumour sounded however was that Visa corporate was making this change. But like most rumours, it was just that. A rumour.

Ron

[Corey Bryant]

The rumor could be they are thinking of raising the rates again in April. Maybe that is what you heard?

-Corey

[warrisr]

I sure hope not!

I just managed to negotiate a reduction in my rates after 2 years of operation. Would hate to have that wiped out with an across the board increase of some sort.

Ron

[Djurre]

So, you can charge their creditcard even when the preauthorization has expired, and without sending in a new authorization?