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Why do transactions take so long to appear in my statements?

by MrFrugal 01 July 2009 |

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Why is it that when I pay for something with my debit card it takes 2 to 3 days for it to show up in my statements? The exception to the rule seems to be money withdrawals.
I know of other European countries where all transactions are immediately available thus allowing for greater transparency.
There's nothing worst than looking at your statement and thinking you have more money than what you actually have. This is even more true when you're dealing with joint accounts.

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MrFrugal posted
FYI this question was prompted, amongst other things, by this article:
http://www.lovemoney.com/blog/johnfitzsimons/texting-bank-balances-is-a-step-too-far-2760.aspx
Posted on 01 July 2009 | Love 0 loves Report
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URRZZ posted
One possible answer is that the bank isn't necessarily aware of the transaction straight away. Unless it's a Visa Electron card (where all transactions have to be authorised by the bank to ensure that they would not send the cardholder overdrawn) then the tranaction might not necessarily need to be authorised directly with the bank (it will depend on details such as the retailer type, transaction amount etc).
To process the transaction, the merchant has to send the transaction details to their 'acquirer' (which usually happens overnight). The acquirer then passes the details to the card operating company (Visa, Mastercard, American Express etc) who then pass it to the card issuing bank. And that process tends to take a day or two.
Even if they have processed and authorised your card details ,the merchant themselves may choose not to release the transaction to their acquirer for some time - for example, until they have actually despatched goods to you.
In my experience, if the bank does get a request to authorise a transaction ,then it will reduce the 'available balance' of the account to take account of the fact that there is potentially a transaction coming. If the transaction details do not actually come through after a week or so, the 'available balance' figure is restored to the original amount.
Posted on 03 July 2009 | Love 0 loves Report
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Olipro posted
there's a 3 day clearing process - generally the reduction is reflected immediately in your "available balance" but will only show after 3 days on your actual balance as the merchant must charge your card after obtaining authorisation.
sometimes the authorisation can "fall off" and your balance appears to increase, then the merchant re-authorises and charges the second time, finally taking the money successfully from your account.
this is the same across the entirety of Europe - the only occasional exception to the rule is when a person has a "checked funds" card such as Visa Electron (or Solo) or if the payment is being paid through some country-exclusive system - for example, if you take cash out in the UK, it's processed through the Link network which debits your account instantly.
If you're abroad then the transaction (and currency exchange) goes through Visa/MasterCard/whoever and takes 3 days to clear.
Either way, don't complain, if your current account pays interest, then you earn interest on the money you spent 3 days ago.
Posted on 05 July 2009 | Love 0 loves Report

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