What Is the Block/Unblock Function in Online Payments?

A customer places an order through a food delivery app and chooses to pay by card. The order amount is not transferred to the business immediately. Instead, the amount is temporarily blocked on the customer’s card.

This process is called pre-authorization. Pre-authorization allows a business to verify that the customer has sufficient funds on their card before the order is prepared or the service is provided.

Once the order is successfully delivered, the blocked amount is captured and the payment is completed. If the order does not go ahead, an unblock operation is performed, the hold is released, and the funds become available to the customer again.

What Will You Learn in This Article?

In this article, we will answer the following questions:

• What is pre-authorization?
• How does the block/unblock function work?
• Is the blocked amount transferred to the business?
• What happens after the service is completed?
• What is the difference between an unblock and a refund?
• How is pre-authorization used in food delivery and taxi applications?
• Why is pre-authorization important for businesses?
• How does YIĞIM help businesses manage this process?

What Is Pre-Authorization?

Pre-authorization is the process of temporarily blocking a specific amount on a customer’s card.

During this process, the system checks whether the card has sufficient funds for the order or service. The amount is temporarily held on the customer’s balance, but it is not yet transferred to the business.

The pre-authorization process mainly consists of three stages:

Block: Holding the Amount

The order or service amount is temporarily reserved on the customer’s card. The customer cannot use those funds for other transactions.

Capture: Charging the Amount

Once the order is delivered or the service is successfully completed, the pre-authorized amount is converted into a completed payment.

Unblock: Releasing the Hold

If the order or service does not go ahead, the pre-authorized amount is not charged. The hold is released, and the funds become available to the customer again.

Simply put:

• The order is placed: pre-authorization is performed and the amount is blocked.
• The order is completed: the amount is captured.
• The order does not go ahead: an unblock operation is performed.

What Does It Mean to Block an Amount on a Card?

Blocking an amount on a card means temporarily reserving those funds for a specific order or service.

For example, a customer has AZN 150 on their card, and AZN 40 is pre-authorized for a food order. The amount available for the customer to use temporarily becomes AZN 110.

The blocked AZN 40:

• Has not yet been paid to the business;
• Cannot be used for other purchases;
• Has been temporarily reserved for the order;
• Can be captured once the order is completed;
• Can be unblocked if the order does not go ahead.

The transaction shown on the customer’s card during pre-authorization is not a final payment. It is a temporary hold awaiting completion of the service.

Is the Blocked Amount Transferred to the Business?

No. During pre-authorization, the money is not transferred to the business immediately.

The bank checks whether the card is active and whether sufficient funds are available. If the request is approved, the amount is temporarily blocked on the card.

The business receives the payment only after the order or service has been successfully completed.

This approach allows the business to verify the customer’s ability to pay before delivering the service, while ensuring that the customer is charged only for a completed service.

What Happens After the Order Is Completed?

Once the order is successfully completed, the pre-authorized amount is captured and converted into an actual payment.

For example:

• The customer orders food worth AZN 35.
• AZN 35 is pre-authorized on the card.
• The restaurant prepares the order.
• The courier delivers the order to the customer.
• The blocked AZN 35 is captured, and the payment is completed.

At this stage, the amount is not unblocked. The pre-authorized amount is converted into a finalized payment.

What Happens If the Order Does Not Go Ahead?

If the order or service is not completed, the business performs an unblock operation.

This may happen in the following situations:

• The restaurant does not accept the order;
• No courier is available;
• The service is not provided;
• A taxi ride does not take place;
• The order is canceled under eligible cancellation conditions.

In such cases, the pre-authorized amount is not captured, and the hold is released.

When an unblock operation is performed through YIĞIM, the amount is immediately returned to the customer’s available balance. The customer does not need to wait several business days for the funds to become available again.

This feature significantly improves the customer experience, especially for food delivery, taxi, courier, and other services where cancellations may occur frequently.

Practical Example: Taxi Application

A customer orders a taxi through an application and chooses card payment. The ride amount, or a predefined guarantee amount, is pre-authorized on the card.

The driver accepts the order, the trip begins, and once the customer reaches the destination, the blocked amount is captured.

If the trip does not take place, the driver does not arrive, or the order is canceled under no-fee cancellation rules, an unblock operation is performed. With YIĞIM, the blocked amount is immediately returned to the customer’s available balance.

Pre-authorization allows the taxi platform to confirm that the card is active and that sufficient funds are available before the ride begins. The customer, meanwhile, pays only for the completed trip.

Other Use Cases

Pre-authorization and block/unblock functionality can also be used in:

• Logistics and delivery services;
• Online stores;
• Home cleaning and repair platforms;
• Hotels and reservation systems;
• Car and equipment rental;
• Parking services;
• EV charging stations;
• Digital marketplaces.

For example, an online store may pre-authorize the order amount while checking product availability. If the product is in stock, the payment is captured. If it is unavailable, an unblock operation is performed.

What Is the Difference Between Unblock and Refund?

Unblock and refund are different payment operations.

With an unblock, the amount has not yet been captured by the business. The funds held during pre-authorization are simply released back to the customer.

With a refund, the payment has already been captured. The business later submits a request to return the full or partial amount to the customer.

The main differences are as follows:

Status of the Amount

With an unblock, the money has not yet been transferred to the merchant.

With a refund, the payment has already been completed and the amount has been charged.

Time Required for the Amount to Reappear

With YIĞIM, an unblocked amount is immediately returned to the customer’s available balance.

With a refund, the time required for the amount to appear in the customer’s balance may depend on the processing periods of the bank and card network.

Merchant Commission

With a refund, the merchant is charged a commission for the payment transaction that has already taken place.

With an unblock, the payment was never completed, so the merchant is not charged a transaction commission.

Because of these differences, pre-authorization can provide faster and more cost-effective payment management for orders that do not go ahead.

Why Is Pre-Authorization Important for Businesses?

Pre-authorization helps businesses:

• Verify that the card is active;
• Confirm that sufficient funds are available;
• Link payment collection to service completion;
• Avoid charging for orders that do not go ahead;
• Reduce the number of refund operations;
• Avoid commission costs on unsuccessful orders;
• Release customer funds more quickly;
• Manage payment risk more effectively.

For example, if a food order is not delivered, the business does not need to capture the payment, pay a commission, and then issue a refund. The pre-authorized amount is simply unblocked.

What Are the Benefits for Customers?

When implemented correctly, pre-authorization allows customers to:

• Avoid paying for services that were not provided;
• Pay only for completed orders;
• Regain access to their funds more quickly when an order does not go ahead;
• See unblocked amounts immediately in their balance when using YIĞIM;
• Track the status of their order and payment more clearly.

However, because the blocked amount cannot be used for other transactions until the order is completed, customers should be informed about this in advance.

How Does the Customer See a Blocked Transaction?

In a banking application, a pre-authorized amount may appear as:

• A pending transaction;
• A blocked amount;
• An incomplete payment;
• Temporarily reserved funds.

What Mistakes Should Businesses Avoid?

Businesses should not:

• Perform pre-authorization without informing the customer;
• Confuse block, capture, and unblock operations;
• Delay unblock requests for canceled orders;
• Present unblock and refund as the same process;
• Leave the completion stage of an order undefined;
• Fail to inform the customer in advance about when the amount will be captured.

For food delivery, completion may mean that the order has been handed over. For a taxi service, it may mean that the trip has ended. For logistics, it may mean that the parcel has been delivered to the recipient.

What Should Businesses Consider When Choosing a Pre-Authorization Solution?

Businesses should evaluate:

• Secure pre-authorization of the amount;
• Capture of the amount when the service is completed;
• Immediate unblock when the service does not go ahead;
• Transaction status tracking;
• 3D Secure support;
• PCI DSS compliance;
• Ease of technical integration;
• Reporting and management capabilities;
• Availability of technical support;
• Commission conditions for unblock operations.

The right pre-authorization solution should reduce operational costs while keeping the process clear and convenient for the customer.

How Can YIĞIM Help Businesses?

YIĞIM helps businesses implement pre-authorization, amount blocking, payment capture after service completion, and hold release when the service does not go ahead.

With YIĞIM’s block/unblock functionality, businesses can:

• Temporarily block the order amount on the customer’s card;
• Verify that sufficient funds are available;
• Capture the payment after the service is completed;
• Immediately unblock the amount for unsuccessful transactions;
• Manage the process without paying a transaction commission for unblock operations;
• Monitor transactions through a unified system.

With YIĞIM, an unblocked amount is immediately returned to the customer’s available balance. No transaction commission is charged to the merchant for an unblock operation. This helps businesses provide a better customer experience while reducing additional costs associated with orders that do not go ahead.

This functionality is especially useful for food delivery, taxi services, logistics, e-commerce, reservations, and businesses where service completion is confirmed at a later stage.

Conclusion

Pre-authorization allows the amount for an order or service to be temporarily blocked on the customer’s card first and converted into a completed payment only after the service has been delivered.

For a food order, the amount can be pre-authorized when the order is placed and captured after delivery. In a taxi application, the amount can be blocked before the ride and converted into a payment once the trip is completed.

If the service does not go ahead, the amount is not captured and an unblock operation is performed. With YIĞIM, the unblocked amount is immediately returned to the customer’s available balance, and the merchant is not charged a transaction commission.

With a refund, however, the payment has already been completed. Returning the amount may take longer, and the merchant may still be charged a transaction commission.

From this perspective, pre-authorization helps businesses manage payment risk and costs more effectively, while ensuring that customers pay only for services that have actually been completed.