The main difference between Pre-authorisation and Incremental Authorisation is their purpose and functionality.
Pre Authorisation is the initial authorisation used to secure a certain amount of funds for a transaction., based on an estimated or expected amount the cardholder is likely to spend.
The purpose of the initial pre-authorisation is to reserve the specified amount from the cardholder's available credit or funds, to ensure it is available when the transaction is settled.
Incremental authorisation comes into play when the initial or pre-authorisation amount is insufficient to cover the total cost of the transaction.
If the cardholder's actual spending exceeds the initial authorisation, then an incremental authorisation request can be made to increase the authorised amount.
This method allows for additional funds to be reserved in order to cover the remaining cost of the transaction.
Incremental authorisations are typically based on revised estimates – or higher expenditure expectations – and are used to increase the initial pre-authorised amount.