How a pre-authorisation works

  1. What is a pre-authorisation hold?

A pre-authorisation hold is the term commonly used by banks in situations where a customer purchases services or goods using a credit/debit card, or a digital wallet (e.g. PayPal) and an amount is held by the customer’s bank on behalf of the merchant as a ‘pre-authorised hold’. These funds are merely placed “on hold” and no money is debited from the customer’s account until the transaction is completed and final payment is processed. 

In Ola’s case, in some circumstances, an amount is held as a pre-authorised hold at the time of booking your ride. Depending on the circumstances, the amount held may be equivalent to the estimated ride fare, $1 or some other amount. This amount is only debited from your card/account when your ride is completed. If, for any reason, your ride is cancelled, then the release of the pre-authorised hold amount will be initiated by Ola immediately.

Pre-authorisation allows Ola to validate the credit or debit card used for payment and to check whether there is sufficient balance in your account for the ride or otherwise. Likewise, if payment is made through PayPal for example, pre-authorisation enables PayPal to do the same.

If, for any reason, the validation of the card fails, you will receive a message in your Ola app stating that authorisation has failed and that you may, at your discretion, try using another card or payment method. In such cases, you will not be able to book a ride on Ola unless you have successfully completed the pre-authorisation hold stage.

  1. What is the difference between pre-authorisation and charge?

A pre-authorisation hold is the temporary hold of a predetermined amount of money in your bank account. This hold may be initiated by Ola when you make a booking for an Ola ride. The amount held may be the full amount of the estimated ride fare or $1 or any other predetermined amount as required by Ola. 

The purpose of pre-authorisation is to enable Ola to validate your credit or debit card. If you have selected to pay through PayPal, the pre-authorisation hold will be initiated by PayPal for the same purpose. 

While this hold is in place, your bank will set aside the pre-authorised hold amount for the purpose of payment for your ride. This amount may be shown on your credit or debit card or PayPal statement and is described as “OLACABS TEMPORARY HOLD”. It is important to remember that this amount has not actually been deducted from your account and will be released once a charge has been made or if your Ola ride booking is cancelled, as described below. In some cases, depending on your bank’s processes, the amount may not be released for some time (e.g. 2 weeks). Ola has no control over the length of time taken for your bank to release the amount. You are advised to contact your bank to determine the bank’s usual timeframe and processes for temporary holds.

A charge on the other hand is the debiting of an amount equivalent to the ride fare of your Ola ride from your bank account by Ola, or, if paying through PayPal, by PayPal. This happens on completion of the ride. This amount is reflected in your credit or debit card or PayPal account statement as “OLACABS RIDE PAYMENT”.

In the event you cancel your Ola ride after confirming your booking, the pre-authorisation hold will be released on cancellation.

  1. How will I know if a pre-authorisation hold has been made?

You will be notified that a pre-authorisation hold has occurred through a notification displayed on your Ola app when you make a booking for a ride. In most cases, you will also be able to see this hold as a transaction item in your credit or debit card or PayPal statement as “OLACABS TEMPORARY HOLD”.

While this hold is in place, your bank will set aside the pre-authorised amount for the purposes of payment for your ride. It is important to remember that this amount has not actually been deducted from your account and will be released after a charge has been made or if your Ola ride booking is cancelled. In some cases, depending on your bank’s processes, the amount may not be released for some time (e.g. 2 weeks). Ola has no control over the length of time taken for your bank to release the amount. You are advised to contact your bank to determine the bank’s usual timeframe and processes for temporary holds.

  1. For how long will the pre-authorised hold amount affect my available balance?

If you are paying by way of credit or debit card, the pre-authorisation hold amount will affect your available balance prior to the completion of your Ola ride, upon which the amount will be used as payment or part-payment for the ride. In the unlikely event that the pre-authorisation hold amount is more than your Ola ride fare, the excess amount will be released by Ola immediately. 

However, in some cases, depending on your bank’s processes, the pre-authorisation hold amount (or excess thereof) may not be released by your bank for some time (e.g. 2 weeks). Ola has no control over the length of time taken for your bank to release the amount. You are advised to contact your bank to determine the bank’s usual timeframe and processes for temporary holds. You are advised to contact your bank to determine the bank’s usual timeframe and processes for temporary holds.

If you are paying by way of PayPal, the entire pre-authorisation hold amount will be released on completion of your Ola ride and an amount equivalent to your ride fare will be debited from your bank account by PayPal.

  1. Is the pre-authorisation hold amount equal to my ride fare?

Not necessarily. The pre-authorisation hold amount is a predetermined amount that either represents the full amount of the estimated ride fare for your Ola ride or $1 or any other predetermined amount as may be required by Ola. 

  1. Will this happen with all the bookings created?

Pre-authorisation holds may be made on selected bookings only or may be made on all bookings. This selection process is system-driven and takes into account the number of rides you have previously taken, your payment method and/or the value of the estimated ride fare of your Ola ride. 

If you have any further questions on pre-authorisation holds, please contact us at support.au@olacabs.com 

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