A card sale takes seconds at the counter, but the money usually reaches your bank one or more business days later. In between, the sale is authorized, sent to your processor in a batch, cleared through the card network, settled between banks, and paid to you under your merchant agreement. Weekends, holidays and when you close your batch explain most of the wait.
Key takeaways
- Authorization approves a sale but moves no money. Clearing and settlement do that afterward.
- Your batch cut-off time decides which processing day a sale joins.
- U.S. interbank card settlement generally runs Monday through Friday.
- Your contract with your acquirer, not the card network, sets when your account is credited.
- Deposits are usually net of refunds and chargebacks, so they rarely match gross sales.
What happens between the tap and the deposit?
Authorization is the request to approve the sale. Visa's developer glossary (opens in a new tab) defines it as the step that decides whether a transaction is approved or declined by the issuing bank, which is the cardholder's bank. The acquirer is the bank that sponsors your merchant account. Authorization holds the cardholder's funds or credit, but no money moves yet.
Clearing follows. Visa describes it as the process in which the transaction is validated, assessed and actually moved through the network. The acquirer sends sale details to the network, which routes them to each issuer to post to the cardholder's account.
Settlement is the exchange of money between banks. Visa calls it the final stage, where each party's net financial position is calculated and reported.
Funding is when your acquirer or processor credits your business bank account.
A 2013 Federal Reserve Bank of Philadelphia discussion paper, based on a briefing from Mastercard (opens in a new tab), traces the same chain. It notes that when the cleared transaction reaches the issuer, the authorization hold drops and the charge posts.
Why do batching and cut-off times matter?
For credit and signature-style debit sales, your terminal or software stores each approved sale in a batch. The Philadelphia Fed paper explains that merchants send authorized sales to their acquirer in batches, typically at least once a day, and busy merchants may batch several times a day.
Your processor sets a daily cut-off time. A batch closed before it joins that day's processing. A batch closed after it, or left open, waits for the next processing day. Check that your terminal's batch time lines up with your processor's cut-off.
PIN debit is different. The same paper explains that PIN transactions use a single message, so authorization and clearing happen together at purchase. There is no batch to close; only the money still has to settle.
How do weekends, holidays and the Fed's schedule affect timing?
Networks approve sales around the clock, but money between banks moves on banking days. The Philadelphia Fed paper notes that U.S. card settlement generally happens Monday through Friday, and that most Mastercard settlement volume at the time moved over Fedwire, the Federal Reserve's wire service.
A Federal Register notice from November 2025 (opens in a new tab) states that Fedwire runs from 9:00 p.m. ET the previous evening to 7:00 p.m. ET, Monday through Friday, excluding holidays observed by the Reserve Banks. The National Settlement Service, which settles obligations for private clearing arrangements, runs 9:00 p.m. to 6:30 p.m. ET on the same days. The Board plans to add Sundays and weekday holidays, with the Reserve Banks expected to implement this in 2028 or 2029. These hours are as of that notice; check the Fed's current schedule.
So a sale on a weekend or Federal Reserve holiday usually settles on the next banking day.
Example (illustrative timeline)
This table follows a Friday evening sale. The 10:00 p.m. cut-off and the funding terms are invented for the example; yours may differ.
| When | What happens |
|---|---|
| Friday, 7:30 p.m. | Customer taps a card; the sale is authorized in seconds |
| Friday, 9:45 p.m. | The batch closes before the 10:00 p.m. cut-off |
| Friday night | The processor sends the batch for clearing |
| Saturday and Sunday | No interbank settlement; the sale waits |
| Monday | Banks settle and the acquirer receives the funds |
| Monday or Tuesday | Your account is credited, depending on your funding terms |
Had the batch closed at 10:30 p.m. Friday, it would have joined the next processing day, and the deposit could slip by a day.
What decides next-day or same-day funding?
The Philadelphia Fed paper is direct: when a merchant's account is credited is set by the contract with the acquirer, not by network rules. In 2013 it said most merchants were credited within 24 hours of their sales entering settlement, and that funds take an extra transfer when your deposit account is at a different bank from your acquirer.
So "next-day" or "same-day" funding is part of your processing agreement. It usually depends on:
- Your batch cut-off time, and whether you meet it.
- Where your business account is held and when that bank posts credits.
- Whether a weekend or holiday falls in between.
- Your account's risk terms.
How do holds and reserves change timing?
A hold pauses funding on a batch or transaction, for example while the processor reviews unusual activity, and delays that deposit until the review ends. A reserve is money the acquirer keeps back from deposits to cover future refunds and chargebacks; the Philadelphia Fed paper notes that the acquirer is responsible if a merchant fails to meet its obligations. See what a rolling reserve is for more.
Why doesn't the deposit match your sales?
Settlement is calculated net. The Philadelphia Fed paper describes refunds and chargebacks being deducted from what the acquirer is owed, and interchange being collected during settlement. Your deposit usually reflects similar netting.
Processors also handle their fees in different ways. Some deduct fees before each deposit (often called net funding, or daily discount). Others deposit sales less refunds and chargebacks and bill fees separately, often monthly (gross funding, or monthly billing). One deposit can also combine several batches and adjustments. Chargebacks explained covers deductions from disputes.
Frequently asked questions
Why was the customer charged before I was paid?
Authorization holds the cardholder's funds at the time of sale. Your money arrives after settlement and funding, which happen on banking days.
Does closing my batch earlier speed up funding?
Only if it gets your batch in before your processor's cut-off.
Will I get paid on a bank holiday?
Usually not. As of the November 2025 notice, Fedwire and the National Settlement Service close on holidays observed by the Reserve Banks, so funding normally moves to the next banking day.
Who can tell me my exact funding schedule?
Your processor or acquirer. Your merchant agreement sets the funding terms, and your processor can confirm its cut-off time.
Sources
- Clearing and Settlement of Interbank Card Transactions: A MasterCard Tutorial for Federal Reserve Payments Analysts (opens in a new tab)
- Visa Developer Glossary (opens in a new tab)
- Federal Reserve Action To Expand Fedwire Funds Service and National Settlement Service Operating Hours (opens in a new tab)