Payment Processing · Payment Technology
A guest opens a bar tab. A hotel takes a card at check-in. A rental shop approves a deposit before the kayak goes out. A furniture maker approves an order it will not ship for a week. In every case the business asks the customer's bank to set money aside now and collects it later. That set-aside is an authorization hold, and it does not last forever.
How long it lasts depends on two clocks. The card networks set the outer limit. Your processor then decides how much of that time it will actually give you, and it is often less. We compared Visa's published rules with the windows Stripe, Square, Toast, Helcim and Clover publish, on 29 September 2026.
When a card is authorized, the issuing bank approves the amount and usually reduces the customer's available balance by it. Nothing has been paid yet. The money only moves when you capture the payment, which is also called completing or closing it. Until then the hold is a promise that expires.
Visa's guidance for merchants makes two points that matter here. First, an authorization is meant to be settled. When it is not, it ties up the cardholder's money, and Visa says merchants are often blamed for it. Second, Visa lets any merchant use an estimated authorization when the final amount is not known yet, and then an incremental authorization if the estimate turns out too low. There is a condition: the estimate "must be a genuine estimate and must not be an arbitrary amount", and it must not include tips or "a buffer for damage". Padding a hold to cover possible damage is not what an estimate is for.
Visa simplified its time limits in April 2024. Since then, the maximum time between a Visa authorization and the transaction being processed is:
Visa says incremental authorizations do not extend those limits. A long hotel stay or rental that outlasts the window needs the original authorization reversed and a new one requested. Visa's other rule that matters most is at the end. If you process a sale after its authorization has run out, it falls under the same dispute condition as a sale with no authorization at all.
The differences are large. A Friday-night tab that is not closed until Sunday afternoon is past Square's usual hold and far past Toast's saved-card window. A made-to-order piece authorized online on a Monday is still inside Visa's 10 days nine days later, on the Wednesday of the next week, but outside Stripe's standard 7.
Stripe is the only processor we checked that documents longer holds in detail, and it limits them. Extended authorizations, which can reach 30 days, and incremental authorizations, which raise the amount on a hold, are both for users on its interchange-plus pricing. A merchant on Stripe's standard blended pricing has to ask support for access.
Where the 30 days apply also depends on the card. For Visa, extended holds are standard for hotels, lodging, vehicle rental and cruise lines. Other types of business can have them for an extra 0.08% per transaction, only on payments the customer starts, and not for healthcare, bill payment or debt repayment. Mastercard allows 30 days in every merchant category. American Express allows it for lodging and vehicle rental, and says the money must be captured no later than the end of the stay or rental. Discover allows it mainly for travel, lodging and passenger transport. Stripe also warns that customers see their money held for longer, and recommends a clear statement descriptor to avoid disputes from payments they do not recognise.
If your business routinely finishes work more than a week after taking the card, such as custom orders, repairs or event deposits, ask your processor for its windows in writing. The alternative Square suggests in its own documentation is simpler: save the card with the customer's permission, let the hold lapse, and charge the saved card when the work is done.
Leaving a hold to expire on its own is not free, and it is not kind to your customer either. Visa's guidance says that if a sale will not go ahead, the whole authorization must be reversed within 24 hours of the merchant knowing. If you capture less than you authorized, the difference must be reversed within 24 hours of completing the sale.
Visa charges a misuse of authorization fee on approved authorizations that are never matched to a sale or a reversal, and it names one common cause: $1 "test transactions" used to check a card instead of Visa's account verification service. Mastercard charges similar processing integrity fees. Fiserv's spring 2023 pass-through fee schedule, posted by North Carolina's Office of the State Controller, listed Visa's fee at 9 cents and Mastercard's pre-authorization fee at 4.5 cents, the latter for authorizations not reversed or cleared within 30 days. Those are 2023 figures and may have changed. If you are on interchange-plus pricing, look for these lines on your statement. On flat-rate pricing you will not see them separately.
Your customer sees the other side of this. Toast says holds "typically disappear one to two business days" after the transaction, but some guests see a pending charge for five or more days. Square says it can take three to five business days for pending pre-authorizations to be consolidated into one charge. On a debit card that is real money the customer cannot spend, and "you charged me twice" is a common reason for a dispute.
For restaurants and bars, where tabs are opened every night, tab handling is one of the main differences between point-of-sale systems. Our restaurant processor guide compares them.
