---
title: Preauthorizations
description: Secure customer funds and reduce chargeback risks by placing a hold on credit card transactions before finalizing payment.
---

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# Preauthorizations

## Secure customer funds and reduce chargeback risks by placing a hold on credit card transactions before finalizing payment.

### What is a Credit Card Preauthorization?

A **preauthorization** (or “preauth”) is a temporary hold placed on a customer’s credit card for a specified amount before the actual charge is captured. It allows you to **verify available funds** and **secure payment** before capturing (charging) the amount.

This is especially useful when:

- The final amount may vary (e.g., due to added items or services)
- You want to confirm card validity and customer commitment
- You prefer to delay charging until service or delivery is complete

Once the transaction is confirmed, the preauthorized amount can be **captured** in full or partially, depending on your final invoicing.

### What Happens After a Preauthorization?

Once a transaction is preauthorized, you have two options:

- **Charge the transaction (capture the funds):**  
  You can charge the **same amount or a lower amount** than originally authorized. If you attempt to **charge more than the preauthorized amount**, there is a risk that the additional funds will not be available on the customer's card, as only the original amount was reserved.
- **Release the preauthorization:**  
  If the transaction is canceled or no longer needed, you can release the hold. This cancels the preauth and returns the funds to the customer’s card.

### How to Use Preauthorizations in Cashflow.io

You can use the preauthorization feature with the following receivable tools:

#### 1. **Payment Requests**

When creating a payment request, select the **Request Preauth** option instead of charging the card immediately.  [Learn how to create a payment request](https://support.cashflow.io/creating-a-payment-request-1?hsLang=en)

**2.** **Manual Payments**

When creating a manual credit card transaction, choose the **Preauthorize** option instead of capturing the payment upfront. [Learn how to process a manual payment](https://support.cashflow.io/manual-payment?hsLang=en)

You can return to the [**Receivables History**](https://support.cashflow.io/view-receivables-history?hsLang=en) to charge or release the transaction as needed.

**NOTE:** This feature is only available with certain processors. Please contact our support team for more information.

### Status Indicators for Preauthorized Transactions

Cashflow.io displays the following statuses to help you track the transaction:

**Preauth** – The hold has been successfully placed on the card, but no funds have been charged yet.

**Paid** – The preauthorized transaction has been charged and funds successfully received.

**Released** – The preauthorization was released and no funds were collected.

### Additional Notes

- Preauth holds generally expire within **30 days**, depending on the customer’s card issuer and the processor.
- You should **charge or release** the transaction within that window to ensure proper settlement.
- Once charged, the funds are transferred and the transaction is complete. If released, the hold is lifted and no funds are collected.

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