When you make a purchase, the transaction doesn’t happen in real-time; that is, the money doesn’t get deposited in the merchant’s account immediately. The transaction has to go through a few processes, which involve about 4 parties; the merchant, acquiring bank, issuing bank, and card association. After making a purchase, either with your debit or credit card, you will notice the “pending transaction tag” on your account online or in a mobile banking app. If you are the curious type, I bet you would want to know what the tag means.
A pending transaction is a transaction that has not happened yet. In other words, a pending mark on your bank account signifies a transaction that hasn’t been completely processed.
There are a few transaction terms some account holders are yet to understand. Some newbies, for instance, may not really know why a pending tag is being displayed on their online banking after making a purchase. And if care is not taken, such abnormally might make them pretty anxious. There are also some account holders out there who are yet to grasp the entire concept of a pending charge. If you fall in any of the two categories of people outlined, this article is definitely for you. Moving forward, I will help you understand what a pending transaction means on your bank account.
What Does Pending Transaction Mean On Your Bank Account?
There are many misconceptions surrounding a credit or debit card transaction, including debit and credit processing. One of the biggest of them all is that these transactions post in real-time. Of course, it is not really bad if one thinks that way.
We live in the era of 5G internet, supersonic jets, high-speed trains, and other pretty fast inventions. So why should a financial expert come out and tell you that a transaction doesn’t happen immediately? Sounds surreal, right? However, if you consider that thousands of people make purchases and payments daily, you will understand why these transactions don’t occur in real-time.
In fact, one of the reasons why a transaction may take a few days to post is due to the processes involved and not solely because of the number of payments to be processed. Technological innovation has made things pretty fast.
Enough of the tech lecture!
So, in essence, what am I trying to say? If you purchase an oven at a store, for instance, and pay using your debit or credit card, the $100 used to purchase the product wouldn’t leave your account and be deposited in that of the merchant at that moment. If you check your online banking or banking app after making payment, you would observe a “pending charge” tag. For those who aren’t quite familiar with the system, let me brief you on what a pending transaction is.
What Is a Pending Transaction?
A pending transaction is a transaction that the merchant hasn’t completely processed. For instance, if you buy a product with a debit or credit card, it will almost always appear as pending immediately when you check your account online or in a mobile banking application.
If you make a purchase and the merchant fails to take the money from your account, in most scenarios, it will drop back into your account after 7 days. This can be about 28 days for car hire, hotel reservations, including other hire transactions.
Your Balances Changes After a Pending Transaction:
After purchasing a product, you wouldn’t only notice the pending tag if you check your online account; you will also see a slight change in your account balances. You will see that the funds associated with the purchase will reflect the current balance, while your available balance will reflect the money in your account.
You cannot perform any transaction with the funds displayed as your current balance. Your available balance, on the other hand, reflects funds that are available to you. For accuracy reasons and to prevent incurring fees from your bank, it is best that you use your available balance as your actual account balance.
The pending tag you see will eventually disappear after the transaction has been posted; that is completed. If, after 5-7 business days, the tag is still visible on your online banking or mobile banking app, don’t hesitate to contact the merchant or your bank if the merchant cannot provide you with a satisfying explanation.
Now, back to the real question of this article. Suppose you’ve been seeing the words “pending transaction” on your bank account but don’t know what it means. Or if you are seeing these words for the first time and is eager to know what it means, then I suggest you read the following sentence.
You see, the tag displayed on your bank account after making a purchase with your debit or credit card signifies that the transaction isn’t complete yet. The merchants have to check that you have enough funds to complete the purchase, and other parties involved in the process will have to play their part before the transaction goes through or post.
Are Pending Transactions Already Deducted From Your Account?
As I said, when you make a purchase at a mall or grocery store, boutique, etc., your payment isn’t quickly transferred or deposited into the merchant’s bank account. Instead, it is held by your bank until the merchant contacts them and calms the funds. Now, after the purchase, you will notice a change in your balances. At that point, you may be confused and may want to know if the pending transaction has left your account already.
Funds associated with pending transactions haven’t been withdrawn from your account yet, neither have they been deposited into the account of the merchant (in the case of a deposit), at least not officially or finally.
When you see the tag on your bank account, you don’t have to panic. All you have to do is wait for a few days (3 to 5 days), and the tag will vanish after everything has been settled. If you have any questions ensure you reach out to the merchant or your bank.