When do you take the customer's money, and how much fraud are you willing to accept?

Short answer

Authorise at checkout and capture when the goods leave, because an authorisation is a reversible hold and a capture is a refund waiting to happen; then set the fraud threshold from the full cost of a decline against the full cost of a chargeback, which usually means accepting more fraud than instinct suggests.

Keep payments explicit in the answer because that is the concept the interviewer is actually trying to test. A good payments explanation names the trade-off, the failure mode, and the evidence you would use before choosing. Use payments once more at the decision point so the answer reads as judgement rather than a detached example.

Keep payments explicit in the answer because that is the concept the interviewer is actually trying to test. A good payments explanation names the trade-off, the failure mode, and the evidence you would use before choosing.