Getting Paid in a Frictionless World
The Case For Smarter Authorizations in Unattended Retail
In the world of unattended retail—where innovation moves faster than a driverless car down the freeway—ensuring every transaction is successful isn’t just a nice-to-have. It’s a necessity. At Apriva, we’ve been empowering vending and unattended operators for nearly two decades. And while the technology behind grab-and-go smart coolers, EV charging stations, and frictionless retail is advancing rapidly, one challenge remains as stubborn as ever: how do you make sure you get paid?
This question—especially relevant as unattended solutions move beyond traditional vending into high-convenience, high-ticket, and high-tech verticals—comes down to one key factor: how much money are you asking the customer’s bank to authorize up front?
This concept is known as pre-authorization or prior-authorization (also known as “pre-auth”, “prior-auth”, or just “auth” for short). And as simple as it sounds, the implications of getting it wrong can eat into your margins fast. In fact, we’d argue that pre-auth settings are one of the most underrated levers operators can pull to protect revenue, reduce consumer friction, and increase overall trust in their machines.
Let’s break it down.
What is Pre-Authorization?
Anytime a consumer taps, swipes, or inserts their card to open a locked smart cooler or start an EV charger, a background process is triggered: the payment system sends an “auth request” to their bank. This is essentially asking: Does this card have at least X dollars available right now?
If the bank says yes, the system grants access. But here’s the catch: in frictionless systems, we usually don’t know what the final purchase amount will be. So, the amount in that initial ask—the “auth amount”—is selected somewhat arbitrarily by the operator or processor.
Let’s say you set your auth amount to $10. The customer opens the cooler, grabs $8 worth of snacks, and walks away. Great! The system finalizes the sale at $8 and everyone’s happy.
But what if they grab $15 worth of product? Do you know what happens next with your specific payment setup, whether that’s an incremental auth, a post-auth, or cutting off service? Depending on the answer, multiply this scenario over hundreds or thousands of machines, and the costs add up quickly.
Too High, Too Low - or Just Right?
So what’s the goldilocks number for pre-authorization?
it’s tempting to just set a high number—$50, $75, even $100—so you never lose out. But that comes with tradeoffs. A pre-authorization (pre-auth) can cause a hold on a customer’s card, and each card-issuing bank has its own rules for how long that hold stays in place—sometimes for several days. If the pre-auth is set too high, customers without enough available credit or funds may be declined on the spot. Frequent declines at the point of entry don’t just frustrate customers, they can also cause customers to walk away, assuming the machine is broken.
On the other hand, setting the pre-auth amount too low can backfire in a different way. Many customers can still get approved even if they don’t have enough available funds to cover their full purchase, especially in environments like college campuses where low balances on debit cards are common. One of our early operators—despite our advice—set their auth amount to a single penny ($0.01). Needless to say, unpaid transactions skyrocketed. In these cases, you’re not only losing revenue but also unintentionally creating opportunities for accidental shoplifting.
Here’s an important data point: according to Visa, nearly 80% of cards used in small-ticket unattended purchases are debit cards. At Apriva, we see a similar trend—about 72–73%. Debit cards are linked to checking accounts and are governed by real-time funds availability. If the money’s not there, the transaction won’t go through.
This means the strategy you use for authorizations in unattended retail has to account for the realities of limited funds, not just consumer intent.
The Sweet Spot
So, what’s the sweet spot? Well, we can tell if you email pos@apriva.com! Look, we can’t give all of our knowledge away in a blog post, but we do have a consultative approach. So if your payment provider can’t help advise you on an appropriate pre-auth amount, we’d be happy to help.
here’s our best practice checklist:
- Know Your Customers. Are you serving a college campus, a workplace, or a public space? Debit card usage, average spend, and consumer expectations vary by environment.
- Start with Average Order Value (AOV). You probably don’t want your pre-auth to be less than your AOV, but you’d also probably turn people away if it’s 5x your AOV or more.
- Monitor and Adjust. Ask your payment provider for data on:
- Declined initial authorizations
- Sales greater than the auth amount
- Failed authorizations
Use this data to fine-tune your auth settings by location.
- Educate Your Team. Ensure your technicians and support staff know why authorization settings matter—this isn’t just a tech issue, it’s a revenue protection strategy.
- Communicate Clearly. If your interface allows, consider a simple message that explains temporary holds, especially for debit users. A little transparency can prevent a lot of customer confusion.
Final Thoughts
At Apriva, we love what technology can do. Self-driving cars? Bring it on. Frictionless markets? Already here. Flying cars? The Jetsons made us think we’d have these by now!
But even the best tech needs smart guardrails. Pre-authorization might not sound glamorous, but it’s the invisible backbone of your revenue stream in unattended retail. If you’re seeing chargebacks, missing funds, or confused customers, the answer might lay in your authorization settings. Set it right, monitor it often, and adjust as needed—and you’ll turn one of the biggest points of risk in unattended payments into one of your strongest operational safeguards.
And if you want to dive deeper into your own deployment? Give us a call at 877-435-4141 or email pos@apriva.com —we’re happy to help.
