What is a credit card prepayment?

Credit card pre-authorization is a new type of transaction method. In layman's terms, it is a form of advance payment, which can be understood as a "deposit". When a consumer uses a credit card to book a hotel or air ticket, the bank will first freeze part of the funds in the credit card as a "deposit" for the merchant's consumption. After the consumption is completed, the merchant can officially deduct the money after the cardholder signs and confirms the pre-authorization. This part of the funds.

However, if the consumer fails to confirm pre-authorization in time, the merchant can apply to UnionPay for pre-authorization completion, and then the bank can transfer the funds to the merchant's account.

Knowledge extension

Credit card pre-authorization refers to a transaction in which the card issuer or its agency confirms the permitted frozen limit before the special merchant debits the money. Generally speaking, pre-authorization can also be regarded as an advance payment method close to a "deposit". When a consumer uses a credit card to book a hotel, air ticket, or rent a car, the bank will first freeze part of the funds in the credit card at the merchant's request as a "guarantee" for the consumer's consumption at the merchant. The use of credit card pre-authorization can not only meet urgent needs when consumers are short of cash on hand, but also reduce cash transactions.

Take hotel "pre-authorization" as an example. When a cardholder books a hotel, especially an overseas hotel, if the cardholder makes a reservation through an overseas hotel booking service website, the authorization will be based on the specific booking situation and the popularity of the hotel. , sometimes the agency website does not require the booker to pay in advance, but sometimes it also requires consumers to prepay an amount using a credit card.

If an amount is prepaid, that is, when the agency website requires prepayment by credit card, the transaction performed by the cardholder at this time is a pre-authorized transaction. If the pre-authorization amount required by the hotel is the entire room charge, the hotel will usually perform a "pre-authorization completion" transaction when the customer checks out, and deduct the actual consumption amount from the pre-authorization amount. At this time, the amount swiped by the card will be The actual payment to the hotel is only received by the hotel at this time.

What does credit card prepayment settlement mean (is the credit card prepayment settlement deducted?)

1. What does credit card prepayment settlement mean?

2. Prepayment settlement credit card.

3. What does bank card prepayment settlement mean?

4. What is a prepaid credit card.

5. What does prepaid credit card mean?

6. What does prepaid settlement mean?

1. Prepayment generally refers to the customer delivering money directly to the service operator. Credit card prepayment is a temporary freeze of funds without actual consumption, which is equivalent to a deposit for consumption.

2. Prepayment settlement is a settlement method of currency paid in advance for the services or products that are allowed to be provided.

3. Not all POS machines can perform credit card pre-authorization transactions. UnionPay only allows a few industries such as hotels and car rentals to activate this function.

4. However, the prepayment settlement is a transfer process, and there is a process of fund outflow.

Is there a difference between credit card prepayment and prepayment settlement?

1. Different settlement methods:

Credit card prepayment generally refers to the customer directly delivering the money to For service operators, credit card prepayments are funds that are temporarily frozen and there is no actual consumption. It is equivalent to paying a deposit for consumption, but it is more convenient than paying a deposit and the cardholder does not have to actually take out the money.

Prepayment settlement is a settlement method of currency paid in advance for services or products that are allowed to be provided.

2. Different advantages:

Compared with cash and debit card, credit card prepayment has obvious advantages. Take hotels as an example. The cardholder swipes the card at the hotel front desk for pre-authorization when checking in, and only freezes a certain overdraft limit on the cardholder's card. The actual consumption deduction and settlement will be made when the cardholder leaves the hotel.

The characteristic of advance payment is that there is no limit on the amount; advance payment is part of the payment in the main contract, and the agreement between the parties on advance payment is promissory in nature and does not require actual delivery as a requirement for effectiveness; advance payment is the price An advance payment of one part is still liquidation in nature;

The advance payment does not have the effect of a two-way or one-way guarantee. When the contract is terminated due to the failure of the parties to perform the contract, the advance payment shall be returned. The parties' liability for breach of contract is determined by other clauses agreed in the contract. If there is no agreement on liability for breach of contract, they generally will not be liable for breach of contract.

Extended information:

Purpose of advance payment:

1. To solve the turnover of one party to the contract.

2. Sincerity as a performance of the contract.

Disadvantages of advance payment:

It is not beneficial to the buyer and is generally used when the supply of transaction goods exceeds demand. The buyer has to bear the commercial risks and backlog of funds, which is actually providing credit to the seller; and the seller receives the payment before shipment, which is beneficial and has no commercial risks.

There are two situations of advance payment: one is used as a guarantee for the importer to execute the contract, usually called a deposit. The advance payment period is short and does not account for a large proportion of the transaction amount; the other is when the importer Exporters provide credit with longer advance terms and larger amounts.

Baidu Encyclopedia - Prepayment

Baidu Encyclopedia - Credit Card Pre-Authorization

Can I buy a prepaid card with a credit card?

No, following the recent After the Ministry of Commerce promulgated the Management Measures for Prepaid Cards, the relevant person in charge of the Central Bank recently publicly interpreted the "Measures for the Management of Prepaid Card Business of Payment Institutions" (hereinafter referred to as the "Measures") that will be implemented on November 1. The person in charge said that starting from next month, those who purchase registered prepaid cards or purchase unnamed prepaid cards for more than 10,000 yuan in one time should verify their names, and it is prohibited to use credit cards to purchase prepaid cards and recharge prepaid cards. This move will help prevent prepaid cards from being used for activities such as banking and cashing out. Prohibiting the use of credit cards to purchase prepaid cards can effectively prevent the risks of prepaid card cash-out and credit card cash-out from passing on to each other. "Real-name cards are required for large purchases." The central bank said that the prepaid cards referred to in the "Measures" refer to "the prepaid value of goods or services issued by the card issuer in a specific carrier and form, which can be used to purchase goods or services outside the card issuer." A reporter from the Yangcheng Evening News learned that this type of card refers to a multi-purpose card issued by a specialized card issuer that has obtained a "Payment Business License" and is approved to handle "prepaid card issuance and acceptance". It can be used across regions, industries, and legal persons. Prepaid cards are somewhat different from single-purpose prepaid cards issued by shopping malls, supermarkets, etc. that can only be used within the business scope of the unit. According to the reporter's understanding, some large prepaid card companies are mainly concentrated in Beijing and Shanghai. For example, the consumer cards in the Beijing market mainly include Shangtong Card issued by Zihexin, Fu Card issued by Yufu Industrial, etc.; in Shanghai, the main ones are Lianhua OK Card, a subsidiary of Bailian E-commerce. In addition, prepaid cards are also divided into registered prepaid cards and bearer prepaid cards. The former refers to a prepaid card in which the cardholder's identity information is recorded in the prepaid card business processing system; the latter refers to a prepaid card in which the cardholder's identity information is not recorded in the prepaid card business processing system. The "Measures" stipulate that the fund limit for a single registered prepaid card shall not exceed 5,000 yuan, and the fund limit for a single unnamed prepaid card shall not exceed 1,000 yuan. The "Measures" require that individuals or units purchasing registered prepaid cards or purchasing unnamed prepaid cards for more than 10,000 yuan at a time should use their real names and provide valid identity documents. The card issuer should register basic identity information and keep a copy or photocopy of a valid identity document. If a prepaid card is purchased using a real name, the card issuer shall register the name of the card purchaser or unit, the name of the person in charge of the unit, the name and number of the valid ID, contact information, number of cards purchased, date of card purchase, total amount of card purchased, prepaid card and amount, etc. The "Measures" also require that if an organization purchases a prepaid card for more than 5,000 yuan at a time, an individual purchases a prepaid card for more than 50,000 yuan at a time, or handles a one-time prepaid card recharge business of more than 5,000 yuan, it should use non-cash settlement methods such as bank transfer. Cash is not allowed to increase the transparency of card purchases and top-ups.

That’s it for the introduction to credit card prepayment.