Xero guide – how to pay at pump

How to in Xero…

If you’ve ever used a pay at pump fuel station, you’ve probably noticed a large amount, often £100 or £120, temporarily appearing on your bank account before you’ve even started filling your car.

It’s one of the most common questions I receive from clients when reconciling fuel transactions in Xero, so let’s explain what’s actually happening. Just remember…

It’s not a charge – It’s a pre-authorisation

When you insert or tap your debit or credit card at a pay at pump terminal, the petrol station doesn’t yet know how much fuel you’re going to buy.

You might spend £15 topping up a small car, or £110 filling a large van.

To protect both the retailer and the customer, the payment system asks your bank to reserve (or “ring-fence”) a maximum amount before any fuel is dispensed. This is known as a pre-authorisation. Under current UK industry standards, this is often up to £120, although some retailers choose a lower amount.