Authorization expiration

The timeframe after which an approved authorization is automatically released if not cleared or reversed by the merchant.

Authorization expiration is the timeframe after which an approved authorization is automatically released if not cleared or reversed by the merchant. Understanding authorization expiration is important when managing card programs and reconciling balances, as it affects how long funds remain reserved and helps mitigate financial risks from late captures.

When a cardholder uses an Airwallex issued card to make a purchase, the merchant first sends an authorization request to check whether the cardholder's account has sufficient funds. The authorized amount is held in reserve until the merchant sends a clearing request or a reversal. However, Airwallex cannot hold authorized funds indefinitely. Authorization expiration determines when reserved funds are automatically released back to the cardholder's available balance if no clearing or reversal is received.

Default expiration period

The default authorization expiration period for:

Cardholder initiated and card-not-present (CNP) transactions is 10 days.
Cardholder initiated and card-present (CP) transactions is 5 days.
All merchant initiated transactions is 5 days.

This timeframe provides sufficient time for merchants to send clearing requests while preventing funds from being held unnecessarily long.

For the majority of transactions (over 99%), merchants send clearing or reversal requests within the first 7 days.

Exceptions

Certain merchant categories have extended authorization expiration periods of 30 days due to the nature of their business operations and industry-specific clearing patterns. These categories are identified by their Merchant Category Code (MCC).

Travel and transportation

Travel-related merchants often require extended authorization periods because final transaction amounts may not be determined until after services are rendered. The following MCCs have 30-day expiration periods:

Airlines (MCCs 3000-3341, 3102, 4511): Flight bookings and related services.
Cruise lines (MCC 4411): Cruise bookings and onboard services.
Vehicle rental (MCCs 3351-3500, 7512, 7519): Car, truck, and trailer rentals.
Transportation services (MCCs 4111, 4112, 4121, 4131): Railways, ferries, taxis, and bus services.
Boat rentals (MCC 4457): Boat rentals and leasing.
Lodging (MCCs 3501-3999, 7011): Hotels, motels, and other lodging facilities.
Restaurants and bars (MCCs 5812, 5813): Eating establishments and drinking establishments.
Campgrounds (MCC 7033): Trailer parks and campgrounds.

Merchant country exceptions

Merchants located in certain countries have extended authorization expiration periods to align with regional processing requirements and industry standards.

Authorizations with merchants located in Japan have a 30-day expiration period.

Merchants that send an external authorization indicator

For cardholder initiated and card-not-present (CNP) transactions where the merchant sends an external authorization indicator, the authorization can have up to a 30-day expiration period.

Why authorization expiration matters

Authorization expiration serves several important purposes in the transaction lifecycle:

Financial risk of early release of funds

Authorization expiration periods help mitigate financial risks from early release of funds. When an authorization expires too early and funds are released back to the wallet balance, there is a risk that the funds may be spent before the merchant sends a clearing request. If the merchant then sends a clearing request, the wallet balance can go into a negative balance, creating reconciliation problems and financial risk for you.

The following example illustrates how a 7-day expiration period can create financial risk:

Day	Event	Available balance	Reserved balance	Total balance
0	Initial balance	$100	$0	$100
0	Authorization of $100 is approved	$0	$100	$100
7	Authorization expires (7-day period), funds released	$100	$0	$100
8	Funds are spent for other purposes	$0	$0	$0
10	Merchant sends the clearing request of $100	-$100	$0	-$100

In this scenario, the 10-day default expiration period provides additional time for the merchant to send the clearing request before funds are released, reducing the likelihood of negative balances.

Airwallex compliance

Airwallex implements authorization expiration periods in accordance with card scheme regulations and industry standards.

This compliance framework provides you with the dispute rights in the event of late captures and protections necessary to manage financial risks effectively.

Balance between cardholder experience and operational needs

While shorter expiration periods improve the cardholder experience by returning funds more quickly, they must be balanced against the operational reality of merchant processing times. The tiered approach—with a default period and category-specific extensions—ensures that most transactions complete normally while accommodating industries with longer processing cycles.