Estimated and incremental authorizations
Visa systems and rules allow certain merchants such as lodging, car rental companies, and cruise lines to obtain an estimated initial
authorization when the nal amount of the purchase is unknown and to request incremental funds if needed.
Merchants should follow standard Visa authorization procedures provided by each acquirer to obtain an authorization approval for the
estimated transaction amount, as well as for incremental authorizations. Incorrect coding may result in the issuer not matching the
authorization and clearing, and may result in an improper hold. This may lead to customer complaints to merchants, as cardholders may
believe they have been double charged.
When to use estimated authorizations
Estimated authorizations may only be used when the merchant does not know the nal amount when the transaction begins. For
example, an estimated authorization is appropriate when a cardholder checks into a hotel, but not when the cardholder is prepaying an
agreed amount. Estimated authorizations should be used for:
• Cruise Line and Lodging Merchants: Amount that the merchant expects the cardholder to spend during the voyage or stay, plus
applicable taxes.
• Car Rental Merchants: Cost of cardholder’s intended rental period, plus taxes and mileage rates.
Estimated authorizations must not include charges that cover potential damage or an insurance deductible amount.
When to use incremental authorizations
Incremental authorizations can be used to increase the total amount authorized. Incremental authorizations do not replace the
original authorization — they are additional to previously authorized amounts — the sum of all linked estimated and incremental
authorizations represent the total amount on hold in the cardholder’s account for a given transaction.
At the end of the stay or rental, an incremental authorization must be obtained if the nal amount of the purchase is:
• Cruise Line and Lodging Merchants: Final amount of the purchase is more than 15% higher than the sum of the
authorized amounts.
• Car Rental Merchants: Final amount of the purchase is more than 15% higher than the sum of the authorized amounts
or USD 75, whichever is greater.
BEST PRACTICES FOR AUTHORIZATION AND REVERSAL PROCESSING
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HOW TO PROCESS
In order to appropriately process estimated and incremental authorizations, merchants in the U.S. must ensure that all elds are being
populated correctly, including:
Transaction
Identier (TID)
(Field 62.2)
This eld must match the Transaction Identier (TID) generated by Visa and returned as part of the response
message to the original authorization request. The TID is a key element that links original authorization requests to
subsequent messages, such as reversals.
System Trace
Audit Number
(Field 11)
This is a number assigned by the merchant that uniquely identies a cardholder transaction and all the message
types that it comprises. The same trace number is used in an estimated authorization request and response,
incremental authorization request and response, and in a subsequent reversal request and response.
Retrieval
Reference
Number
(Field 37)
This eld must contain the value from the original authorization request message. The Retrieval Reference Number
is used with other key data elements to identify and track all messages related to a given cardholder transaction.
It is usually assigned by the acquirer, but it may be assigned by a merchant or by an individual electronic terminal.
Authorization
Characteristics
Indicator
(Field 62.1)
The value of this eld needs to be set to “I” in the case of Incremental Authorizations.
Duration
(Field 62.5)
This eld indicates the number of days (from 01 through 99) anticipated for the car rental, cruise or hotel stay.
For prepayments, the value reects the number of days of the expected guest stay or rental covered by the
prepayment. In incremental authorizations, this eld is optional and reects the number of additional days to be
added to the auto rental or hotel stay.
Multiple standalone authorizations should not be processed for one payment transaction. If incremental authorizations are not
properly coded, issuers may not be able to link associated authorizations, which may lead to cardholder frustration. Additionally,
cardholder funds may be held in error.
Incremental authorizations are available to U.S. merchants only.