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Let’s talk about pre-authorization. Pre-Authorization is standard practice used in the industry to check that the customer has available funds in their card or bank account. This ensures that the payment method works and that we will successfully capture funds when the merchant processes their order. This transaction will be for one downpayment and happens automatically when a customer uses PayPal Pay later. If the transaction is successful, the merchant receives the order and processes the transaction, this pre-auth will be replaced by a real transaction. This will appear on the customer’s bank statement as a pending transaction. In some cases, the order may not be processed. Some examples of why this might happen are that the merchant has no stock or if the customer decides they no longer want the item. In this case, the pending authorization will automatically be voided. For the UK this will be voided in 24 hours. For US and A.U. this is 72 hours.