Pending Card Transactions: All You Need To Know

Have you been in a situation when you pay with your card in a shop, you get a success notification in your iCard digital wallet, but the merchant says the payment was not successful and refuses to provide the goods or services?

The likely reason for this is a weak internet connection at the POS terminal.

It leaves a transaction pending with unknown status and the cardholder – frustrated.

Don’t panic – your money is there, but it needs some time and attention before it is returned to you!

To get a clear picture of all possible reasons and how long it might take to get your money credited back to your account, we need to briefly explore the dynamics of card transactions. 

How does a card transaction work? 

As a user, you have one of our debit cards – we are the Issuer.

You tap your card on a contactless POS terminal in a shop – that is the Merchant.

The merchant’s POS transactions are processed by their bank or payment processor – that is the Acquirer.

All transactions that involve the client, the issuer, the merchant and the acquirer go through a roundtrip on a payment network – Visa or Mastercard.

When you tap your card, the POS, via the acquirer, pings the network with your authorisation, which pings us (the issuer). 

We check for available funds, limits and card settings, before we block the amount from your account and send a confirmation signal back to the network, which informs the acquirer and the final notice is displayed on the POS terminal before you walk out with your new buy. 

A weak internet connection might be able to send your payment authorisation, but on the way back, it may be unable to signal the POS terminal of the issuer confirmation.

Types of pending transactions

In theory, it takes time for any transaction to be completed. 

In practice, the majority of transactions are pending less than 2 seconds on the Mastercard and Visa network – before they settle.

Here are a few types of pending transactions:

1) Pre-authorized holds

This kind of transaction usually happens at hotels or car rental companies. The merchant asks for you to pre-authorize an approximate amount, usually higher than what you would have to pay in the end, due to the fact you may have a car rental or a hotel room accident that obliges you to pay more than the daily rate.

This will affect your available balance and will clear off with the precise amount 2-3 business days after you have received the service.

Usually, the hold disappears within 3-5 days after you pay and return the car or leave the hotel, but in some rare cases it can take up to 30 days.

The 2 main reasons for these pre-authorization transactions are unknown final due amount and making sure a valid payment method has been provided.

A major consequence is that a debit card user might not be able to use part of the balance, potentially making other transactions fail, until the hold is cleared.

2) Verifying card details

Some merchants will want to check the ownership of the card by placing a hold of a small amount, usually 1 currency unit, before providing a service.

Just like we do at iCard to verify a stored debit card, a merchant might charge your card a small amount of money and send you an identifier such as a number in the transaction reference.

Verifying the precise amount or the transaction code confirms you are the card owner and have access to your balance and statement.

3) Authorized transactions that haven’t been fully processed

Depending on the payment processor’s systems and processes, some transactions require more time for the acquirer to get the money. 

The frustrating situation in the beginning of the article fits into this category, but is a bit extra special and might cause inconvenience, for which we apologize in advance as it’s beyond our control.

How iCard handles real-time payments alongside pending transactions?

After you authorize a payment to a website merchant or a physical shop, we need to block the amount by deducting it from your account and send you the notification.

99.9% of transactions usually take around 2 seconds to complete.

It might take up to 45 days to get your money released back to your account in the very rare case of your unknown status pending transaction that we mentioned at the beginning of the article. 

Your money will be returned if all daily settlements we receive from acquirers, during this period, do not include the particular payment you are missing.

Beyond pending transactions (chargeback disputes)

Mistakes, fraud or technical issues do happen and you might end up being charged for a product or service you did not purchase or use. 

For such cases, and only when a transaction has been settled and finalized, you can dispute it by requesting to start a chargeback process.

A chargeback is here to protect cardholders, involves the issuer, the acquirer and the payment network, incurs costs and, in essence, is a mediation process with a positive or negative outcome for you.

Chargeback is suitable when:

• you see a transaction you don’t recognize; 
• you are not refunded your money after you return a good; 
• you receive an inferior service to what was promised; 
• you do not receive the product or service you paid for;
• when the merchant is not cooperating.

Initiating a chargeback process requires administrative resources and costs 15.00 Euro.

Get in touch with our support team if you do not recognize a transaction or if you feel your case is eligible for a chargeback.

We will examine your case situation, before confirming it makes sense to dispute your payment via Mastercard or Visa networks.

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