When buying physical goods, the payment process is straightforward: money is transferred, and goods are delivered. However, when you don’t know the exact price in advance, pre-authorization or pre-payment can ensure that both parties are confident in the payment process.
At some gas stations, a reservation is placed on a bank account, and after refueling, the final amount is collected. Last Mile Solutions has implemented a similar process for EV charging.
Differences Between Pre-Authorization and Pre-Payment
Pre-Authorization
For card-based payments (debit, credit, prepaid), we perform a pre-authorization on the card provided by the driver. This process reserves an amount on the driver’s account, allowing us to collect up to the pre-authorization amount. The reserved amount remains on hold until the final charge amount is determined. Only the final amount is debited from the driver’s account, and any unused pre-authorized funds are released back to the customer.
Pre-Payment
For account-to-account payment methods (e.g., iDeal, Bancontact), the EV driver makes a pre-payment to Last Mile Solutions. The full pre-payment amount is transferred from the customer’s bank account to Last Mile Solutions. Once the charging session is complete and the final cost is calculated, any remaining balance is refunded to the EV driver’s account.
What Happens if the Charging Session Fails?
If a charging session fails to start, you will not lose your money:
Pre-Authorization
In the event of a failed charging session, we won’t capture any payment. A temporary hold might appear on your account, but this will be automatically canceled by your bank within a few minutes or a few business days. The timing is dependent on your bank and their processing time.
Pre-Payment
If a charging session fails after a pre-payment, we will immediately initiate a refund for the unused amount. Similar to pre-authorization, your bank will process the refund, which can take anywhere from a few minutes to a few business days. The timing is dependent on your bank and their processing time.
Key Takeaways
- Pre-Authorization reserves funds, while Pre-Payment transfers funds upfront.
- You only pay the final charging cost in both cases.
- Any unused pre-authorized or pre-paid amounts are refunded if the session fails.