Card Authorization Policy

How k&z processes, authorizes, and secures payment card transactions for quantum AI infrastructure services, with full PCI DSS compliance.

Effective Date: January 1, 2026 — Version: 1.0

1. Introduction

This Card Authorization Policy (“Policy”) describes how K&z Limited (“k&z”) processes, authorizes, and secures payment card transactions in connection with the k&z quantum AI infrastructure platform and associated services (the “Services”). This Policy supplements the Billing & Consumption Policy and is incorporated into the Terms of Service.

k&z is committed to the security and privacy of your payment information. We work with PCI DSS Level 1 certified payment processors to ensure that your card data is handled with the highest standards of security.

2. Purpose of Card Authorization

2.1 Overview

Card authorization is the process by which k&z verifies that your payment card is valid, has sufficient funds or credit available, and is authorized for use with the Services. Card authorizations occur at several points during the client lifecycle:

  • When you first add a payment card to your k&z account;
  • When you subscribe to a paid plan or reserve QPU capacity;
  • When monthly consumption charges are processed;
  • When you update your payment card information; and
  • When a recurring charge is initiated for subscription or reserved capacity billing.

2.2 Accepted Cards

k&z accepts the following payment cards:

  • Visa (credit and debit)
  • Mastercard (credit and debit)
  • American Express

Prepaid cards and virtual card numbers are accepted but may be subject to additional verification. Corporate purchasing cards (P-Cards) are accepted for enterprise accounts.

3. Authorization Process

3.1 Initial Card Verification

When you add a payment card to your k&z account, we perform the following verification steps:

  • Card Number Validation: The card number is validated using the Luhn algorithm and checked against known card number patterns for the applicable card network.
  • Expiration Date Check: The card’s expiration date is verified to ensure the card is currently valid.
  • CVV/CVC Verification: The card verification value (CVV/CVC) is transmitted to the card issuer for verification. k&z does not store CVV/CVC values after the initial verification.
  • Address Verification (AVS): The billing address provided is checked against the address on file with the card issuer. AVS discrepancies may require additional verification.
  • 3D Secure Authentication: For cards enrolled in 3D Secure (Verified by Visa, Mastercard SecureCode, or American Express SafeKey), the cardholder will be prompted to complete additional authentication with their card issuer.

3.2 Micro-Charge Verification

Upon adding a new card, k&z may initiate a temporary micro-charge (typically HKD 10.00, USD 1.00, or EUR 1.00) to verify that the card is valid and can process transactions. This charge is automatically reversed within three (3) to five (5) business days. You may see this as a “pending” or “authorization” charge on your card statement.

4. Pre-Authorization Holds

4.1 When Pre-Authorization Holds Are Applied

k&z may place pre-authorization holds on your payment card in the following circumstances:

  • New Account Activation: A pre-authorization hold may be placed when you activate a new account with consumption-based billing to verify card validity and available credit.
  • High-Consumption Alerts: If your estimated consumption charges during a billing period exceed a predefined threshold, a pre-authorization hold for the estimated amount may be placed to ensure sufficient funds are available.
  • Reserved Capacity Purchases: A pre-authorization for the first payment installment may be placed at the time of order before the formal charge is processed.

4.2 Hold Amounts and Duration

Pre-authorization holds are temporary and are typically released within seventy-two (72) hours if not captured as a charge. The amount of the hold corresponds to the estimated charge. If the actual charge is less than the hold amount, the excess hold is released. If the actual charge is greater, an additional authorization for the difference will be requested.

4.3 Impact on Available Credit

Pre-authorization holds reduce the available credit or balance on your payment card. k&z is not responsible for overdraft fees, declined transactions, or other consequences resulting from pre-authorization holds reducing your available balance.

5. Charge Timing

5.1 Consumption Charges

Consumption-based charges are captured (charged to your card) on the first business day of each month for the preceding calendar month’s usage. If the charge exceeds your card’s available limit, k&z will attempt to process the charge in up to three (3) smaller installments.

5.2 Subscription and Reserved Capacity Charges

Subscription fees and reserved capacity installments are charged on the billing date specified in your account settings or Order Form. Annual subscription fees are charged in a single transaction at the beginning of each annual billing period.

5.3 Immediate Charges

Certain transactions are charged immediately, including: one-time purchases (such as prepaid credit bundles), plan upgrades, and capacity add-ons.

6. Card Verification and Security

6.1 Tokenization

k&z does not store raw payment card numbers on our systems. When you provide your card details, they are transmitted directly to our PCI DSS Level 1 certified payment processor, which returns a secure token that represents your card. This token is used for all subsequent transactions, ensuring that your actual card number is never stored or accessible within the k&z platform.

6.2 Fraud Detection

k&z and our payment processor employ advanced fraud detection measures, including:

  • Real-time transaction risk scoring based on card usage patterns, geolocation, and device fingerprinting;
  • Velocity checks to detect unusually high transaction frequency;
  • Cross-referencing with known fraud indicators and blacklists;
  • Machine learning models trained on payment fraud patterns; and
  • Manual review for high-value transactions exceeding defined thresholds.

6.3 Additional Verification

k&z may require additional verification for transactions that are flagged by our fraud detection systems, including: identity verification, confirmation from the cardholder via phone or email, or submission of a copy of the card statement showing the verification charge.

7. Recurring Charges

7.1 Explicit Consent for Recurring Billing

Before any recurring charge is initiated, k&z obtains your explicit consent. By adding a payment card to your k&z account and checking the “I agree to recurring billing” checkbox during subscription activation, capacity reservation, or consumption-based billing enrollment, you authorize k&z to charge your card on a recurring basis for the applicable fees. The consent confirmation includes the billing frequency, estimated amounts, and a link to the cancellation process. This recurring billing authorization remains in effect until you cancel the applicable service or remove the payment card from your account.

7.2 Notification of Upcoming Charges

k&z will send you an email notification at least five (5) days before processing recurring charges, including the estimated amount and the date on which the charge will be processed. For consumption-based billing, the notification will include a summary of usage for the billing period. Each notification includes a link to review your active subscriptions and cancellation options.

7.3 Easy Cancellation

You may cancel recurring billing at any time by contacting support@kandz.co or submitting a cancellation request through the Support Center. Cancellation takes effect at the end of the current billing cycle. See our Refund & Cancellation Policy for full details.

7.4 Card Expiration and Updates

If your card is nearing expiration, k&z will send a reminder notification at least thirty (30) days before the expiration date. Our payment processor may automatically update your card details through card network account updater services. If automatic updates are not possible, you must update your card information manually to avoid service interruption.

8. Failed Payments

8.1 Retry Logic

If a charge to your payment card is declined, k&z will:

  • Notify you immediately via email of the failed payment, including the reason for decline (if available from the card issuer);
  • Retry the charge automatically after three (3) business days;
  • If the second attempt fails, retry once more after an additional five (5) business days; and
  • If all three attempts fail, notify you that your account is at risk of suspension and provide fourteen (14) days to update your payment method.

8.2 Grace Period

During the failed payment retry period, your access to the Services will continue uninterrupted for fourteen (14) days. After fourteen (14) days with no successful payment, k&z reserves the right to suspend access to the Services. On-demand services will be suspended first; reserved capacity services will be suspended after an additional fourteen (14) day notice period.

8.3 Alternative Payment

If card payment continues to fail, you may arrange alternative payment by wire transfer or direct debit by contacting support@kandz.co. Enterprise clients may transition to invoice-based billing with approved credit terms.

9. Chargebacks and Disputes

9.1 Contact k&z First

If you believe a charge on your card statement is incorrect, please contact k&z billing support at support@kandz.co so we can resolve the issue quickly. Our billing team can investigate and resolve most issues within two (2) business days, which is typically faster than the card network dispute process.

9.2 Card Network Dispute Process

k&z fully complies with card network dispute processes. If a dispute is filed with your card issuer, k&z will:

  • Receive notification from the card issuer or payment processor;
  • Provide documentation to the card issuer, including usage records, authorization evidence, and applicable terms;
  • Attempt to contact you to resolve the matter directly; and
  • Cooperate fully with the card network’s dispute resolution procedures.

9.3 Dispute Outcomes

If a dispute is resolved in the client’s favor, the disputed amount will be refunded in accordance with card network rules. If a dispute is resolved in k&z’s favor, the client may be responsible for: (a) an administrative fee of HKD 200 (or equivalent) per dispute to cover processing costs; and (b) in cases of repeated unresolved disputes, transition to wire transfer or direct debit billing.

10. PCI DSS Compliance

10.1 Commitment

k&z is committed to the security of payment card data. Our payment infrastructure complies with the Payment Card Industry Data Security Standard (PCI DSS) at the applicable level for our transaction volume.

10.2 How We Achieve Compliance

  • No Card Storage: k&z does not store, process, or transmit raw payment card data on our systems. All card data is handled exclusively by our PCI DSS Level 1 certified payment processor.
  • Tokenization: Card data is replaced with secure tokens that cannot be used to retrieve the original card number.
  • Encrypted Transmission: All payment data is transmitted over TLS 1.3 encrypted connections.
  • Annual Audits: Our payment processor undergoes annual PCI DSS assessments by a Qualified Security Assessor (QSA).
  • SAQ Compliance: k&z completes the applicable PCI DSS Self-Assessment Questionnaire (SAQ) annually.

11. Contact

For questions about card authorization or payment issues:

  • Billing: support@kandz.co
  • Payment Issues: support@kandz.co
  • Fraud Concerns: support@kandz.co