Paytm Pre-Auth: The Future of Secure Digital Payments


Payment pre-authorization is crucial to merchants who accept pre-orders from customers for their goods or services. Many modern businesses require pre-authorization at some point to ensure a better payment flow and a positive customer experience. In addition to that, this feature protects both merchants and consumers from false transactions.

Using pre-authorization, merchants can offer a seamless experience during checkout as well as it helps ensure the availability of funds for themselves. Also, this facility of pre-authorization from a payment gateway enables instant refunds to customers while saving on transaction charges.

At Paytm, we provide the right pre-authorization solution for your growing business. We call it Pre-Auth, a unique and highly useful payment facility by Paytm. In this blog, we will discuss some of the major benefits of Paytm Pre-Auth which will help you to secure your payments and improve your operational efficiency at the same time.

What exactly is Paytm Pre-Auth?

Paytm Pre-auth or Pre-authorization is basically a facility for online merchants to hold a certain amount of funds on a customer’s Paytm account. When the customer places an order, the money is reserved by the merchant for the purpose of future transactions. Once the service or order is completed, the reserve amount will be captured/deducted by the merchant. Merchants can block the order amount for a specific period of time for ensuring successful payment post delivery. During this period, the funds are inaccessible to the customer.

Pre-Authorization Process Decoded

For merchants, especially with large ticket size, payment pre-authorization is an indispensable feature that ensures secure and seamless transactions after delivery of products or services. To understand this better, let’s take a look at the steps below that are involved in the Paytm pre-authorization process:

  • A customer visits a merchant’s website/mobile app.
  • On the platform, the customer is requested to link his/her Paytm account for a seamless checkout.
  • Once the account is successfully linked, the customer adds goods/services on the merchant’s site/app.
  • Merchant checks the sufficient balance for the order using Check Balance API.
  • If the customer doesn’t have sufficient balance for the transaction, the merchant initiates an add-money process with the differential amount.
  • Subsequently, the merchant calls the Paytm Pre-auth API to hold the amount in the customer’s account.
  • Once the order/service fulfillment is done, the Capture API initiates the deduction of the amount from the payment source and confirms the transaction.

Also, merchants can easily cancel or refund a successful transaction by using the Refund Status API.

How is pre-authorization beneficial for You?

There are several reasons that make pre-authorization extremely useful for merchants, especially with high transaction volumes and large ticket size. Here are some of the key benefits pre-auth has for online businesses:

1. Guarantee payments from customers
With pre-authorization/hold of funds, merchants can make sure that the customer will pay for the services provided. It allows merchants to block amounts in the customer’s payment source and gives assurance that he/she keeps appropriate funds for successful transactions.

2. Positive experience to customers
Pre-authorization is also great when it comes to positive customer experience. It makes the checkout process more efficient and enables instant refunds on the platform when needed. Overall, the pre-authorization facility helps create a hassle-free payment system for users.

3. Improves operational efficiency
Merchants can improve operational efficiency since the customer account is validated once for seamless future payments. Also, the steps of refund request and outward payment can be avoided here using pre-authorization.

4. No refund fees
Pre-authorized payments are cost-effective for both customers and merchants. In Pre-Auth, cancellation time is significantly reduced and, as the payment has not been made, the refund process becomes simpler. Plus, there are no fees at all.

5. Increases customer satisfaction
When a customer cancels an order for which he/she has already paid, it becomes hard to wait for the refunds. And this is a common problem in online payments that can be resolved with pre-authorization. This feature allows you to cancel the order without the need for a refund, resulting in increased customer satisfaction and trust.

In conclusion
Pre-authorization not only creates a better payment flow but is also helpful in successful order placement and assured payment after order fulfillment or delivery of service. Using the Paytm Pre-Auth feature, merchants can provide customers with a one-click payment experience on their business website or mobile app. Furthermore, it allows a smooth & secure checkout every time. With assured payments and easy refunds, this payment feature is great for cases where ticket size is usually high. So, enable the Paytm Pre-Auth payment solution on your platform today and get timely, assured payments always post-delivery.

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