After pre-authorization, a certain amount is blocked on the customer's credit card as a security, which will be debited within a certain period of time. This ensures the availability of credit for the merchant.

Where do reservations often occur?

Pre-authorizations and reservations are often used in offline as well as online commerce.
For example, when booking a hotel stay, a deposit will be blocked on the customer’s credit card upon booking. The reservation blocked is proportional to the amount to be paid. At the customer's checkout, the transaction is authorized and debited from the customer's account.