How does pre-authentication work on our passenger app?
The new Passenger app utilises a number of Anti-Fraud measures, including, but not limited to Biometrics (in the case of Apple and Google Pay) and 3dSecure. These processes use Strong Customer Authentication – an initiative being rolled out by the Financial Conduct Authority – all banks need to sign up to use Strong Customer Authentication by September 2021, although most (including Stripe, who we use to process card transactions through the app) have already completed the work required.
Where most online payments, protected by Strong Customer Authentication are paid at the point of sale (consider amazon purchases for example), taxi journeys are not paid for in advance. Because of this, we need to initiate a pre-authorisation so that the requirements of SCA can be fulfilled. The pre-authorisation action forces the bank to consider the use of 3dSecure to verify the transaction. Without this step, 3dSecure would not be used, which could lead to an increase in card fraud.
Second to this, the pre-authorisation amount taken ensures that customers have the funds available in advance of the journey. In the same way that a Hotel or Car Rental company will ‘hold’ a certain amount on your card when you use their services, we do the same via the Passenger App. The actual amount of the pre-authorisation is the Estimated Fare + 15%. The pre-authorisation amount is more than the estimated journey amount because the fare quoted is just that – an estimate. The fare in-vehicle may exceed the estimated amount, or the passenger may choose to go via a different point or change their destination altogether. By taking an additional amount this ensures that in most cases, the actual fare will fall within the pre-authorised amount. Where this happens, any amount over the actual fare will be released at the end of the journey. Please note that banks can take up to 5 working days to release a ‘pre-authorisation’ hold on funds.
In the case where a fare is in excess of the pre-authorised amount, the full fare needs to be requested from the bank – we cannot use the pre-authorised amount and then take an additional amount – this would lead to multiple transactions which banks will invariably decline. In this case, the passenger must ensure they have sufficient funds to cover both the pre-authorisation amount AND the fare. Confusion can be caused if the customer does not have the funds available for both of these, hence the reason for taking the additional 15% at the time of booking. The occurrences of bookings more than 15% higher than the estimated fare are rarer, so this should cause minimal authorisation issues.
When a pre-authorisation is taken, any unused element will be released either (1) at the end of the journey, or (2) if a booking is cancelled by the office or passenger (or is marked as a No Pickup by the driver). It is important to note that banks will take up to 5 working days to release the pre-authorisation hold. The length of time is at the discretion of the bank and is not something that we can influence.