Website help - holding a credit card deposit

[heisthegaffer]

Hi all

A friend has set up a website where people lend things to each other but to cover damage or non returns of items etc they need a way of holding a deposit via a debit/credit card etc just like hotels do.

Can this be done and is there a name for this service?

[Butter Face]

Is that like an Escrow type service?

[akirk]

you dont hold a deposit - you pre-authorise the card...
you can do this with some merchant accounts...

[heisthegaffer]

akirk said:

you dont hold a deposit - you pre-authorise the card...
you can do this with some merchant accounts...

Thanks, yes, this is what my friend needs.

[miniman]

Keep in mind that card pre-auths expire after a period of time, which varies by card issuer. You then need to re-auth the card to keep the funds open. You can alternately do a zero-auth to verify that the card is legitimate / active but obviously that doesn’t reserve any funds.

Obviously you really don’t want to get into storing card details yourself, so you would typically store a token from the payment service provider instead.

It’s not a simple area by any means.

[alorotom]

miniman said:

Keep in mind that card pre-auths expire after a period of time, which varies by card issuer. You then need to re-auth the card to keep the funds open. You can alternately do a zero-auth to verify that the card is legitimate / active but obviously that doesn’t reserve any funds.

Obviously you really don’t want to get into storing card details yourself, so you would typically store a token from the payment service provider instead.

It’s not a simple area by any means.

Depending on the authorisation type though you can have it up to 11mths though I believe.

One of the online foam mattress companies does this for essentially 12mths interest free but it’s held on your credit card and the auth reduces by 1/12 every month

[miniman]

alorotom said:

Depending on the authorisation type though you can have it up to 11mths though I believe.

One of the online foam mattress companies does this for essentially 12mths interest free but it’s held on your credit card and the auth reduces by 1/12 every month

Very risky way to do either "credit" or hold a deposit - only requires the card to be reported stolen and you've then got to chase down the cardholder.