Deposits, Pre-authorisations and Upfront Card Payments
Compare collecting a deposit, taking full payment and placing a temporary card hold, including transaction counts, refunds and timing.
The short answer
A deposit or full upfront payment collects money. A pre-authorisation reserves an amount for possible later capture, subject to the provider’s rules and an expiry window. Choose the flow that fits the booking or service, and compare both the payment charges and the customer terms. A hold is not a payout into your bank account.
In this guide
Three different payment arrangements
| Arrangement | What happens | Main point to check |
|---|---|---|
| Deposit | Part of the total price is collected before the service; a balance remains. | How the deposit is matched to the booking and deducted from the balance. |
| Full upfront payment | The whole price is collected in advance. | Refund handling, changes and the terms customers agree to. |
| Pre-authorisation | An amount is reserved on an eligible card for later capture. | Expiry, capture conditions and release of unused funds. |
Square’s appointment documentation describes deposits as partial payments collected during online booking, with specific product limitations. Stripe documents separate authorisation and capture, with validity windows that vary by card network and transaction type. Do not assume a hold lasts indefinitely or that every payment method supports one.
Match the arrangement to the service
- Confirm when you need money received, rather than merely reserved.
- Check whether the booking system supports the exact deposit, balance and cancellation workflow.
- Ask how amendments, partial refunds and split bookings appear in the records.
- For holds, ask who monitors expiry and what happens if the service date moves.
- Give staff a clear way to see the amount already collected and the balance still due.
A booking several months ahead should not be treated as covered by an ordinary short-lived authorisation. Ask the provider about the approved approach for the timing involved. A pre-authorisation that expires before capture can leave you needing a new payment approval.
Worked example: the deposit changes the payment mix
Fictional tariffs. Assume 100 completed £100 appointments each month, no cancellations and no refunds. Remote payments cost 1.5% plus 20p; in-person payments cost 1.2% with no fixed fee.
| Arrangement | Fee per appointment | Monthly processing |
|---|---|---|
| Pay £100 in person | £1.20 | £120 |
| Pay £100 remotely in advance | £1.50 + £0.20 = £1.70 | £170 |
| Pay £30 remotely, then £70 in person | £0.45 + £0.20 + £0.84 = £1.49 | £149 |
The deposit arrangement costs £29 more monthly than payment entirely in person, but £21 less than full remote prepayment. It also creates two payments per completed booking rather than one. The business receives the same £10,000 total service price if every appointment completes.
This example does not assume deposits prevent cancellations or increase profit. Add the actual cost of cancellations, refunds and the booking system separately.
Keep payment technology separate from customer terms
The ability to collect or retain a payment does not establish a legal right to keep it. The CMA explains that consumer deposit and cancellation terms must be fair; a charge is not automatically fair simply because the customer agreed to it. Do not assume that calling a deposit non-refundable settles the question.
Explain the price, deposit, balance date and cancellation process before booking. Have the terms checked for your service where needed. Ask the payment provider what evidence and permissions it requires for later charges, and check which original fees remain after a refund.
Build the comparison from completed and cancelled bookings
Count deposit payments and balance payments separately. Use the correct remote and in-person rates, and avoid counting a captured deposit and the full booking price as additional sales. Our refund-fee guide explains why returning money may leave a processing cost.
The calculator can compare the stated card channels and payment counts for a simple completed-booking scenario. Keep authorisation expiry, releases, cancellation patterns and refund timing in separate workings. It is a cost tool, not a booking or card-hold management system.
Common questions
Is a pre-authorisation the same as taking a deposit?
No. A deposit is a collected payment. A card pre-authorisation reserves an amount that may later be captured under the applicable rules. It can expire without becoming a payment.
Are deposits always non-refundable?
No. Refund rights depend on the applicable law and fair customer terms, as well as the circumstances. The payment system’s capabilities do not decide whether a business may legally retain the money.
Put your own figures to work.
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Sources and how to use this guide
Primary references checked on 15 October 2026:
- Stripe: separate authorisation and capture, including expiry
- Square UK: appointment deposits and product limitations
- Competition and Markets Authority: deposits, cancellation charges and fair terms
Worked examples are original fictional scenarios, not customer results, market averages or provider quotations. Unless stated otherwise, they use a consistent VAT basis and include only the costs listed. Provider prices, eligibility and terms can change. Check your written agreement before deciding.
Our guides explain costs and comparison methods. They do not rank the whole market or claim hands-on product testing. Source links are references, not a claim of partnership. Read the calculation method and limitations, or about the service.