Setting the Authorization Amount

Description

EV Charging is similar to Fuel Dispensing in that funds are ‘reserved' on a cardholder’s card before dispensing the fuel or energy.

Returning Authorized Amounts

Payter and their Gateway partners always send adjustments to the authorized amounts when the final amount is confirmed. When this adjustment is lower than the originally authorized amount, Payter expect the Card Issuer to promptly return the ring-fenced funds to the Card Holder.

Payter know from experience however that the reliabilty of this process varies greatly across the thousands of Card Issuers we process payments for. We detail what the Charger Controller should and must do in this section, and in Session Management, to ensure a positive customer experience.

Four Main Approaches

1. Authorize a smaller amount, and increment (top-up) this amount as required during the session
2. Authorize a smaller amount and attempt to capture the full, larger amount at the end of the session
3. Authorize the MAXIMUM amount, finalizing the lower actual amount at the end of the session
4. User chooses the maximum amount to authorize, capping the charging session from the outset.

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For each of these approaches, we detail the Assumptions, Pro’s and Con’s. Payter expect the Charger Controller or Charge Point Operator to decide on their approach, but will provide advice on a per request basis if needed.

Variable Pricing

Charger Controllers will want to include some form of variable pricing in their approach, and this will affect the authorization amount. Reasons to use variable pricing include:

Location based pricing - Prices are higher where competition is less, consumer expectations meet the pricing, or there are logistic challenges. Examples: Service Stations, Remote locations, near popular Venues/Stadia

Demand and Supply based pricing - Prices change at different times of the day or week to incentivize or disincentivize charging outside of peak demand. This approach also allows the Charger Controller to leverage different energy rates more efficiently.

Reactive pricing - As a minimum, pricing should be changed to reflect any rises in energy costs in the Charger Controllers market.

Authorize Smaller and Increment

Assumptions

• The amount initially authorized is very low, perhaps a 15-30 minute charge
• When the dispensed value matches or nears the current authorized amount, that value is increased incrementally in the background (without driver interaction) to allow further charging.
  • This process repeats, adding to the authorized balance potentially several times until the charge session is completed.
  • If any attempted increment is declined, then the charge session must stop when the current authorized value is reached as no further funds are available.
• When the final amount is confirmed, any remaining, unused, reservation is returned to the cardholder.

Pro's

• The lower amount initially authorized can make the charge point more attractive to drivers who charge smaller amounts, but more often.
• You are more likely to gain an authorization / Less likely to turn away customers who only plan to charge a small amount and have limited funds available.
• The financial risk is very low. You are never going to need to commit for an amount which is not already authorized.

Con's

• Incremental Authorizations might result in additional, small, fees from the Scheme/Acquirer
• The logic needs to be well-timed to ensure charging is not interrupted.
  When an increment fails, for any reason, this should stop the charge session. This can be a significant customer experience issue if that driver has planned a long charge session and the stop was not warranted by a genuine absence of available funds.
• Incrementing is not supported by all terminal models or Acquirers, though support for this feature is increasing.

note

Incrementing existing authorizations are supported on the Apollo Family terminals only. Charger controllers should check with Payter to ensure their selected Acquirer also supports this.

Authorize Smaller and Attempt to Commit for All

Assumptions

• The amount authorized is typically a little more than the average charge for that location
• The dispensed value is allowed to exceed the current authorized value without any intervention or limitation
• When the dispensed amount is confirmed, it is requested from the card
  • This request may partially or even fully fail.

Pro's

• The initial authorization amount can be set to a level that attracts drivers.
• This means authorization success is more likely.
• The charge session will never be interrupted, meaning a very good customer experience.

Con's

• Committing for an amount greater than the initial authorization generates significant risk. Whilst the initial commit will be accepted, the settlement of those funds may subsequently be rejected, resulting in loss of funds for the whole charge session.
• The initial authorization amount can need regular review to ensure it is at the appropriate level.

RISK

This approach carries risk, and can attract fraud. It is often employed to market the Charge Points to drivers where the associated losses can be absorbed. Transactions must be closely monitored by the Charge Point Operator in order to consider any adjustments to this approach over time.

Authorizing the Maximum

Assumptions

• The amount authorized is equal to or greater than the maximum amount of energy dispensed
• In most cases, a final amount will be much less than the amount authorized
• If the maximum limit is reached, the charging stops
• When the amount is confirmed, the remaining reservation should be returned to the cardholder quickly.

Pro's

• There is limited to no risk in this approach.
• The logic for this flow is simple.
• The flow mirrors that used in fuel dispensing, so may be familiar to recent EV converts.

Con's

• The high initial authorization can put off users or result in a higher than necessary number of decline transactions.
• Drivers who charge for small amounts but often, are particularly less likely to want to charge here.
• Charger Controllers and Payter cannot influence how quickly un-spent funds are returned, which can lead to poor customer experiences that are impossible to resolve. Funds are sometimes still reserved for several days, even weeks, and the cumulative effect could cause financial issues for the cardholder, leading to more customer support calls to the Charge Point Operator.

User Chooses the Amount to Authorize

In all the above scenario’s, Charger Controllers have to balance customer expectations versus financial risk and complexity. It is possible however to provide cardholder’s and driver’s with choices that help match their expectations to the Charger Controllers preferred model.

In this case, the same broad flows above apply, but the initial authorization amount can be dynamically set according to driver choice.

The output of a screen like this allows a Charger Controller to set their initial authorization amount. This amount can be a lower expected maximum, following the constraints in Authorizing the Maximum, or it can be a very low amount according to the guidance in Authorize smaller and attempt to commit for all.

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Payter are happy to provide additional advice and share further best practice where it is needed.