Setting the Authorization Amount
Description
EV Charging is similar to Fuel Dispensing in that you ‘reserve’ funds 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 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
Authorize a smaller amount, and increment this amount as required.
Authorize a smaller amount and attempt to capture the full, larger amount at the end of the session.
For each of these approaches, we detail the Assumptions, Pro’s and Con’s of each. Payter expect the Charger Controller 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/StadiaDemand 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 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 authorized value the authorized amount is updated to allow further charging.
This process repeats, incrementing the authorized balance several times until the charge session is completed.
When the amount is confirmed, the remaining reservation is returned to the cardholder quickly.
Pro’s | Con's |
|---|---|
The lower amount initially authorised can make the charge point more attractive to drivers who charge smaller amounts, but more often. You are more likely to gain an authorisation. The financial risk is very low. You are never going to need to commit for an amount which is not already authorized. | Incremental Authorizations usually generate fees from the Schemes which affects revenue from Acquirers. These fees are low however. The logic needs to be well-timed to ensure charging is not interrupted. When an increment fails, for any reason, this will stop charge sessions. This can be a significant customer experience issue if that driver has planned a long charge session. Incrementing is not supported by all terminal models and all Acquirers. |
Incrementing existing authorizations are supported on the Apollo Family terminals only. Charger controllers should check with Payter to ensure their selected Acquirer supports this.
Authorize Smaller and attempt to Commit for All
Assumptions
The amount authorized is a little more than the typical average charge for that location
The dispensed value is allowed to exceed the current authorized value without any intervention
When the dispensed amount is confirmed, it is requested from the card
This request may partially or even fully fail.
Pro’s | Con's |
|---|---|
The initial authorisation 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. | Committing for an amount greater than the initial authorisation 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. |
This approach carries risk, and can attract fraud. It is often employed to market the Charge Points better to drivers where the associated losses can be absorbed.
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 | Con'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. | 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 funds are returned, which can lead to poor customer experiences that are impossible to resolve. Funds are sometimes still reserved for several days, and the cumulative effect could cause financial issues for the cardholder, leading to more customer support calls to the CPO. |
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.