WorldPay Pre-Authorisation - Preventing Fraud

What Is Pre-Authorisation?

Pre-authorisation is also known as deferred payments or deferred processing. When shoppers place an order from your site, pre-authorisation reserves the funds against the credit or debit card used, rather than taking full payment immediately as with full-authorisation - the processing and payment are deferred until such time as you (the merchant) manually complete the transaction.

The shopper experience with pre-authorisation is exactly the same as for full-authorisation. The shopper will not know whether you are using pre-authorisation or full-authorisation. There are no additional costs for using pre-authorisation. All you need to do is request pre-authorisation from WorldPay and make a couple of changes to your settings.

You have about 5 days in which to manually complete the transaction. You can use this time to order more stock or perform additional checks on the transaction to see if it is genuine or not. If you fail to (or choose not to) complete within the time limit, the transaction is "timed out" and reserved funds will be released. No transaction fees are applied for transactions that expire.

Why Use Pre-Authorisation?

Pre-authorisation allows you to accept online orders normally, but allows you to cancel or ignore any transactions that you cannot or will not fulfil, without incurring any costs.

If you receive an order that appears to be fraudulent, you can simply ignore the transaction and avoid chargback fees. There will be no transaction fees. If a customer orders goods that you do not have in stock, you can "cancel" the transaction without incurring transaction fees. You don't actually have to cancel transactions, just do not complete them in your Customer Management System.

How To Set Up Pre-Aauthorisation

The first thing to do is call WorldPay and ask them to set up pre-authorisation on your account - remember to have your company name and company ID handy as you will need to provide these. You may be asked to email them at pre-auth@uk.worldpay.com. If WorldPay haven't replied within 24 hours or so, call them to check if they received your email.

WorldPay will amend your account to use pre-authorisation. This may involve adding another pair of live and test accounts to your WorldPay account and "suspending" the original pair. WorldPay will email you with instructions for changing your shopping cart settings - this will include setting your authMode to 'E' and setting up your new Account ID. You will need to make these changes in the WorldPay page in the FastCart control panel. You should make these changes as soon as possible - if you do not make them, shoppers may not be able to purchase from your site.

Testing WorldPay Pre-Authorisation

When you have made the changes, you need to make some transactions to ensure that all is working as it should do. Leave Test Mode set to 0 - Live. Go to your site and add some products to FastCart. Then proceed through the Order Confirmation to the WorldPay payment page - if you reach the WorldPay payment page then you have probably set up your FastCart account correctly to work with WorldPay pre-authorisation. If not, change your settings in FastCart and try again. If you still have no luck, restore your old settings and try again.

Once at the WorldPay payment page, make a transaction using your normal credit or debit card. If you have set up your FastCart account correctly, the transaction should go through normally. Funds will not be taken from your credit / debit card, but the amount will be reserved for a few days.

Log in to your WorldPay Customer Management System to check that the transaction has been recorded - you may have to wait a little while for the systems to update. When you see the transaction, view it. At the bottom of the page should be a button saying Complete. If you click that button, the transaction will be post-authorised (completed) and payment will be taken from your credit or debit card.

Trading With Pre-Authorisation

Once pre-authorisation has been set up on your WorldPay account and you have tested that all works normally, you can begin trading again. When you receive transactions, check them carefully for signs of fraud. If you suspect that the order is fraudulent or you cannot fulfil it, ignore it and it will time out after a few days. If the order appears to be genuine but you cannot fulfil it, you may wish to contact the cardholder and apologise for having to "cancel" their order.

If the order appears to be genuine and you are happy to fulfil it, you will need to complete the transaction to collect the funds. You should complete the transactions at the time you dispatch the goods - be careful not to dispatch the goods and complete the transaction later, just in case you forget and the transaction times out.