Credit Card Posting

Credit card posting occurs when a cardholder transaction has been settled and recorded with a post date. A post date is created for all types of credit card transactions including purchases, payments, refunds and chargebacks.

Credit card posting is part of the clearing and settlement process that occurs when a cardholder uses their card for a transaction. Other types of transactions may also occur beyond just standard purchases that will also be reported and itemized on a cardholder’s account. Non-standard transactions may include refunds or chargebacks.

Generally all transactions will have a transaction date and a post date. The transaction date is recorded on a cardholder’s account at the time of transaction. Transactions are reported as pending until they are settled at which time they will record a post date. In some cases the transaction date and the post date may be the same however usually the post date is often a day or more after the transaction date.

The funds associated with a specific transaction will be placed on a hold when the transaction occurs. The hold affects the cardholder’s available credit which decreases to reflect the amount of the transaction. Funds will be on hold from the time of the transaction to the post date when they are fully confirmed. Transactions can be voided while in the pending phase which would keep them from proceeding to posted. Once a transaction is posted it can only be reversed by refund or chargeback.

There are several parties involved in the processing of any credit card transaction. The three main entities include an acquiring bank, issuing bank and network processor. When a purchase is made with a merchant their acquiring bank will work to facilitate the transaction. The acquiring bank will contact the processing network associated with the card. The processor then contacts the issuing bank for verification and authorization. Once authorized the processor sends the confirmation to the merchant bank who notifies the merchant and begins the deposit settlement process in the merchant’s account.

Once the transaction has been confirmed by the issuing bank and merchant bank it is considered authorized and will post as pending. Generally a transaction will be pending for one to two days before it is posted to an account. Settlement with the settlement bank usually initiates the final posting.

Communication on a refund or chargeback can vary from the standard transaction process which occurs with a basic transaction. This is because either the issuing bank or merchant may take the lead on facilitating the communication. If a merchant initiates a refund for a customer, the transaction cycle is the same however the communication works to refund a payment rather than add it as a charge. If a chargeback is initiated by the issuing bank, then the issuing bank works to facilitate the communication and may even take on the liability to provide a chargeback to the customer while researching their claim. This type of chargeback is often initiated by the issuing bank for a fraudulent charge.

The time that elapses between a transaction and post date is usually not a major concern for a cardholder unless the transaction is for a credit card payment. With a credit card payment a cardholder will need to know the exact date that the payment will post on in order to ensure that they avoid any late fees. Credit card companies provide clear disclosure on the credit card posting date for payments. Generally most credit card companies have a specific time by which payments must be made each day for same day posting. This is usually standard for business days however it may differ for weekends and holidays. Discover, for example, requires cardholders to submit payments by 5:00 pm Eastern Standard Time for the payment to post that day.