Preauthorisation & USA tips


#1

Just a quick question in 2 parts really:

1: How does preauth work with curve? From what i’ve read, a preauth on curve will actually capture payment and then reverse when original merchant does not capture. If so, why does Curve not recognise this and pass the authorisation but not the capture onto the underlying card.

2: When using Curve in the USA at a restaurant, how exactly does the transaction work in respect to authorisation and capture with regards to the original bill amount being charged and then the additional amount with the tip included?


#2
  1. You are correct for most transactions but for hotel/airlines/car rental transactions over £150, they’ll only authorise until the merchant captures the payment. Everywhere else, the charge will be posted and then refunded after a week or so if not captured.

  2. For tip adjustment, the tip amount will be charged to your card as a seperate charge once the merchant captures the payment. I.e. If your the bill is 50$ and you tip 5$, you’ll see one 50$ charge and separate 5$ charge on your card statement. Worth pointing out though, in the app, it’ll show as just one charge.


#3

You may also see a 50$ charge and 55$ charge. And after some days the 50$ will be refund to your account.


#4

Thanks for the info, I’ve just checked a credit card that I remembered I used once with Curve while in the USA for a tip and the underlying card did indeed show the original amount and then the tip amount separate but the Curve showed it as one whole transaction.

One point I’m still not clear on is how if the card is authorised for the original bill of say $50, can another amount be charged later on, surely this isn’t safe and could be abused. I’m guessing the additional tip amount is charged and if you dispute this with your card company then the merchant has to provide signed tip receipts?


#5

It varies slightly by country but if a charge is adjusted by more than 20%, it’s basically and instant win for the cardholder if it’s disputed. Even then if it’s less, you can still dispute it if you didn’t authorise it.


#6

This is how they works! And you put your signature always. So in that case you can not make a dispute cause you sing for 5$ tips.And you sign the total of 55$. Even if you live cash tips you sign again for the total amount you pay! So there is nothing to worry about. I hope to help you with this. :slight_smile:


#7

Actually signatures are no longer required and card issuers can no longer ask for a copy of the credit card receipt in North America (even if the merchant has an out of date terminal and you actually signed).


#8

And if you have a card where signatures is not a valid authorization method? They’ll match your signature with what?

As an example cards issued here in Portugal don’t support either signature verification or overcharging over the authorized amount, which is great for the cardholder’s security and peace of mind but may cause umforseen issues with merchants used to do it the “American” way


#9

@megamaster If it’s a MasterCard or Visa, then it will support signature verification, it’s just no terminal in Europe will use it (unless the communications link is down and then it might depending on the type of PIN your bank uses).

Every card has cardholder verification list on it’s chip (For example, it might go PIN (there are various types of PIN but I’ll keep it simple), Signature, No cardholder verification). Signature has to be on every MasterCard or Visa card, it’s just PIN might be above it, so if the terminal supports PIN, it’ll ask for that first. You also see some US cards with the opposite (Signature will be at the top but it’ll also support PIN, so the card can still work on an automated machine).

For magstripe transactions, obviously it’ll use a signature either way (and again has to be supported by any Visa/MC issuer with the exception of some prepaid domestic only cards)

The authorisation rules are set by the merchant country, so when you use your Portuguese card in the USA, they can capture over the authorised amount, If you use your card in Canada the 100$ (200$ for gas and groceries) contactless limit applies etc.


#10

I can assure you 100% no Portuguese bank will authorize a signature transaction and it’s a guaranteed chargeback win if it somehow goes through. The banks themselves warn of that if they know you intend to visit the states. Since the late 90s that the Portuguese central bank doesn’t consider a signature to be a reliable way to identify the cardholder.

And what do you mean by stripe being signature only? We had stripe and pin here since the 90s until chip and pin came along in 2005

About the contactless limit, I honestly don’t know, but since the bank can set lower limits than what the law allows, wouldn’t the bank limit prevail in other countries?


#11

While in the EEA, magstripe transactions have been pretty much phased out and in most cases blocked by banks. Visa and MasterCard still require all issuing banks to support signature transactions for merchants who don’t have pin or chip capability, it’s not something that be waived. While you’re correct when swiping in the US the merchant is liable (they are even liable on US domestic cards when swiping), for Visa cards, the bank is liable if the transaction is conducted via Chip and Signature. For MasterCard and Amex, the merchant is liable for chip and signature transactions (if the card supports PIN). Maestro does NOT have to support signature based transactions at all (although the issuer can choose to support it).

For foreign transactions (with the exception of some Canadian debit cards being able to do swipe and PIN in the US), Swipe and PIN has been phased out long ago. Some domestic networks do use it (really only the US and maybe China now though).

For foreign currency transactions, the contactless limit is generally decided by the terminal (due to a variety of factors) and in many countries the limit isn’t stored on the card at all (for example, in Canada, where the limit varies by merchant type) or if it is, it’s a very high number usually way about the limit.


#12

We here still use stripe and pin if for some reason the chip isn’t reading.

I know about Visa/MC requiring everyone to support all cardholder verification methods, however they also mention in multiple notes, in multiple documents, that all their rules are valid unless otherwise stated by local law, which is the case here as the Portuguese central bank doesn’t allow banks to consider a signature as valid cardholder verification method


#13

Swipe and PIN/Sign should be blocked as of October (and even earlier for Visa) in Portugal.

“Effective 12 October 2018, an Issuer must decline authorization of a Transaction conducted in the Canada, Europe, Latin America and the Caribbean, or Middle East/Africa Region when technical fallback from chip to magnetic stripe occurred.”

While signature might not be a technical legal method, you’ll probably find in the terms and conditions of your card that just presenting the card is enough to prove consent (after all it’s no different than buying something online or contactless). Not that it really matters as of April as the US is really just chip and nothing now (with merchants no longer required to collect a signature for any transaction).


#14

People here in Portugal are VERY possessive about their money, that’s why signatures never took off and were killed in the 90s. The idea that just showing the card or forging a signature is enough for someone to take your money would be enough for a lot of people to take their money from the bank and store it under the mattress at home.

It’s required by law that you can only authorize a transaction by inserting a personal intransmissible code, in other words a pin of some sort. With online transactions you have to always do the 3d secure thing where you get a code on your phone that you then use to confirm the transaction. Only a couple years ago was an exception to this made, to allow for contactless payments and even then that’s why the limit for contactless without pin is only 20 Euros. You can pay whatever amount you want above that using contactless, you just have to insert the pin.

To this day a significant number of people request the bank to disable NFC on the card or cut up the antenna on the card just so that no one can take the 20 Euros.

As for the swipe and pin, cards here are all dual scheme, with the national multibanco and then also Visa or MC as a fallback or for international/online use, so probably those transactions are being processed through MB


#15

You’re right the bank don’t ask anymore a copy of signature, but the merchant has the ability to ask for it if his terminal set the CVM to ask for signatures.

I do have one CC which is Chip&Pin only and is really useless for me cause if I want to skip the PIN the card issuer does not allow me. Very annoying!!!

Every card have CVM and the priority of this its depend of the bank.
As you know VISA, Mastercard and American Express will stop requiring Signatures or Pin anymore in the USA and the Europe will follow the same. Cause its not up to the bank.
When I use my Chip&PIN card to a terminal and asking for PIN, simply I press enter without the PIN to skip it! Then the terminal authorize it with no PIN and no Signature. If I make a fallback and swipe the same card then asking me for signature.

As for it, every country has it’s own contractless limit. Take a look the link from wikipedia.


#16

I got caught out by this too. It seems to only apply to situations where bills are presented AND THEN a tip added. It’s scary because Curve let’s you see all the transactions instantly where as we were oblivious to it before Curve. The down side is that the transaction makes it through to your bank account instantly but the refund takes, what feels like, ‘forever’. Not sure how they ensure the correct exchange rate is used so there’s no loss either. During the limbo week.

The £1 Google takes when using online services is how I believe it should work. That transaction seems to be held until the reversal comes through and never hits the bank account. If that was applied to the pre-auth then I’d be much happier because it’s scary seeing transactions you don’t expect.

Come on Curve-meisters, you need to sort it out. You’ll end up getting less support calls about it too.

Does this happen in any other country too?


#17

Good question!

1: When there’s a preauthorisation, we capture the amount on the funding card. We do this because we don’t want to take the risk of being out of pocket, which could bankrupt us. The merchant has 7 days to collect preauthorised payments. If they don’t, the refund will be reflected in your funding account 2-3 working days after being processed.

2: If the bill ($100) and tip ($20) is processed in two transactions the preauthorised amount ($100) will be processed on the card we already captured the fund from and the tip ($20) is processed on the current funding card.

If the bill ($100) and tip ($20) is processed in one transaction ($120), which is typical for the USA, the total ($120) will be processed on your current funding card and the preauthorised for the bill ($100) is refunded to the respective funding card.

In the latter case, you can use the Go Back in Time feature to make sure the payment is on the funding card you wish to use :slight_smile:


I’ve been surprised by the differences between countries. In some countries you can use your pin with contactless payment if it’s over the preauthorised amount, whilst in the UK you need to use Chip + PIN.


True :sweat_smile: In the Restaurant Case described above, the merchant tends to leave the bill (£100) be without sending a reversal.


#18

Why would you have a different bill with a tip. If you decide to add a tip to a bill in a restaurant then they will simply charge the full amount.

For hotels I never give my curve card initially. I always use my Amex and then switch to paying the bill with the Curve on check out.

The system works.


#19

If your Amex don’t charge you foreign fee then why dont use your Amex for the total charge?


#20

It does of course abroad.

I never pre-authorise with Curve. That is daft due to the way it works.