Pre (Authorization) Transaction
‘Pre (Authorization)’ transaction will be normally only confirm the cardholder’s ability to pay, ensuring that the customer’s credit card account is in good standing with sufficient funds to complete the purchase. The transaction amount will be reserved on the customer’s credit card but will not be charged yet until merchant is doing capture or settlement process. This method is mostly used by merchants who have a delayed in order fulfilment process.
Since there might be a delay in charging the customer, this payment or transaction type might not be applicable to digital wallet payment service, such as AliPay, DBS PayLah!, WeChat, etc.
‘Sale’ transaction will combine the (pre) authorization and auto capture (settlement) process, in order to fulfil the order immediately, where issuing bank will straight away charge customer for their order. Credit card associations require merchants to submit a sale transaction request when they fulfil an order immediately.