PayPal's pending authorization feature allows merchants to temporarily hold funds on a customer's account, giving them time to review and process the transaction. This feature is particularly useful for businesses that need to verify the availability of funds or the customer's intent to make a purchase before completing the transaction. However, one common question among merchants and customers alike is when a pending authorization on PayPal expires.
Understanding PayPal Pending Authorization
A pending authorization on PayPal typically occurs when a merchant initiates a transaction, but the funds are not immediately captured. Instead, the merchant places a temporary hold on the customer’s account, which is usually valid for a specific period. During this time, the customer’s account is debited, but the funds are not yet transferred to the merchant’s account. The length of time a pending authorization remains active can vary, depending on several factors, including the merchant’s settings and PayPal’s policies.
Expiry Period for Pending Authorization
The expiry period for a pending authorization on PayPal is typically three days from the date the authorization was initiated. This means that if the merchant does not capture the funds within three days, the pending authorization will automatically expire, and the hold on the customer’s account will be released. However, it’s essential to note that some merchants may have different settings, which can affect the expiry period. In some cases, the expiry period may be shorter or longer, depending on the merchant’s agreement with PayPal.
| Authorization Status | Description | Expiry Period |
|---|---|---|
| Pending | Temporary hold on customer's account | Typically 3 days |
| Authorized | Funds are reserved for merchant | Varies, depending on merchant settings |
| Captured | Funds are transferred to merchant's account | N/A |
Factors Affecting Expiry Period
Several factors can influence the expiry period of a pending authorization on PayPal, including:
- Merchant settings: Merchants can configure their PayPal settings to specify the length of time a pending authorization remains active.
- PayPal policies: PayPal’s policies and procedures can also impact the expiry period, particularly in cases where the transaction is flagged for review or requires additional verification.
- Customer account status: The customer’s account status, such as whether it’s verified or unverified, can also affect the expiry period.
In some cases, a pending authorization may be canceled or declined due to fraud detection or risk assessment algorithms. If this occurs, the merchant will need to re-initiate the transaction or contact the customer to resolve the issue.
What happens when a pending authorization expires?
+When a pending authorization expires, the hold on the customer's account is released, and the funds are made available for other transactions. The merchant will need to re-initiate the transaction if they still want to capture the funds.
Can I extend the expiry period of a pending authorization?
+Merchants can configure their PayPal settings to extend the expiry period, but this may require additional agreements or approvals from PayPal. It's essential to review PayPal's policies and procedures before making any changes to your settings.
In summary, a pending authorization on PayPal typically expires within three days, but the exact expiry period can vary depending on several factors, including merchant settings and PayPal policies. Merchants should carefully review their settings and PayPal’s policies to ensure they understand the expiry period and can manage their transactions effectively.
