Sometimes we receive questions from our Pilates customers about card charges that show as pending. The goal of this post is to explain how credit card charges work!

The reason why it takes so long for purchases to show up on your credit card statement or withdraw from a bank is because of a long complicated process that happens between the merchant and the card issuer. Credit card processing goes through 4 lengthy phases.

1. The first phase is the “Authorization phase.” There are several steps but this part of the process happens instantaneously. After you swipe your card or input it online, the info gets sent to the acquirer who then requests authorization from your issuing bank. The bank then checks if there are adequate funds or credit and whether or not the transaction appears to be fraudulent. If approved, an authorization code is sent back to the acquirer who then informs the merchant that services may be provided. However, money doesn’t actually change hands yet.

2. Two more equally complicated phases called Batching and Clearing occur next. During the Batching phase, merchants store up all the information about credit card transactions they make during the day and deliver them to the card network. The network then requests payment from the card issuer (such as Visa). This is the stage where fees are deducted and so on.

3. During the next phase, Clearing, the acquirer sends the batch to the card network. The card network then requests payment for the transaction from the customer’s issuer. The issuer deducts a transaction fee from the total transaction amount and then routes the net amount through the card network to the acquirer.

4. Only after all of these phases are completed do you enter the Funding phase, where the transaction hits your statement. Debit cards are a little faster because they can skip some intermediary steps, but they can still take a while.

The same rules pretty much apply for refunds. Even when merchant immediately processes a refund on your credit card, the bank has up to a certain number of days (usually 5-7 business days) to process that refund and put it on your credit card account. That means if you request a refund over the weekend and the merchant processes it for your right then, it can still take up to 5-7 days later starting from Monday.