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What are pending transactions?

If you stay on track with your online banking and regularly check your recent bank and credit card accounts, you probably also keep an eye on your balance or available funds, recent transactions, and upcoming credit or debit card payments.  

In some cases, you might notice a purchase or payment marked as pending in your current account. 

In the following sections, we explore in depth what are pending transactions. We define this term, explore how long a company has to take a pending transaction, reveal whether a business can cancel a pending transaction, and more.

What are pending transactions?

As the name suggests, pending transactions refer to card transactions that have been approved by your card issuer but have not yet been fully processed by the merchant.  

These transactions can be purchases for goods or services, deposits, or payments. They can be seen either via your online or mobile banking using your mobile banking app. 

Usually, a transaction is marked pending when the money necessary to cover the transaction is still being transferred between accounts. However, pending transactions may also appear as a result of security checks

These transactions can be direct debits, online checks, direct deposits, debit card transactions, salaries, pensions, or dividend payments. 

On the other hand, standing orders, payments to your credit card, and future-dated payments for a later date from your account can’t be pending transactions. 

If the merchant doesn’t extract the money from your bank account to its business account, it will be returned to you online in a matter of several business days. It usually takes three, but reach up to seven days.

How long does a company have to take a pending transaction?

Different banks have different policies and regulations when it comes to pending transactions. 

However, in most cases, a transaction will no longer be pending after seven business days. 

As a business, it’s key that you understand how pending transactions work and collect all the relevant details from your payment processor

For example, pending transactions can be an advantage in some cases, but for cash flow purposes, it’s vital to familiarise yourself with the process.

How long does a company have to take a pending transaction

Can a business cancel a pending transaction?

Pending transactions are challenging to cancel as the card issuer can’t cancel or alter the transaction. 

However, businesses or merchants can take action by contacting the card issuer and requesting that the transaction be reversed. The hold will be released in this case, allowing the consumer to reclaim their money. 

It’s key to act quickly to guarantee this is possible. It’s recommended that shoppers or users who wish to cancel their pending transactions with a business contact the merchant one or two days after the payment. 

It’s important to note that banks and credit card issuers have the right to decline pending transactions. This usually happens when the purchase amount exceeds the purchaser’s available funds. 

It’s essential to monitor your account activity regularly to prevent additional charges and overdraft fees

The difference between pending and complete transactions

To fully understand pending transactions, it’s essential to compare them against complete transactions, also referred to as posted transactions.

In the case of a pending transaction, the purchase has been authorised. However, the transaction still hasn’t been posted to the shopper’s account.

For instance, a user purchases a laptop for $2,000 via a debit card. Instantly, the pending transaction will appear in the account, but the money won’t be sent to the retailer from the buyer’s bank account immediately.

After the transaction posts, it will show in the account balance as posted or completed. This means that the transaction has been processed and is now visible in your account statement. 

On the other hand, a complete transaction is when the money has been successfully transferred from the buyer to the seller. In this case, the movement of funds is visible in both the shopper’s and the business’s accounts. 

As noted above, keep in mind that pending transactions can influence your available balance, even before the funds haven’t been transferred to the trailer. Once they’ve been posted, they’ll appear in your current balance and no longer influence your available balance. 

The current balance is the total amount of money in a user’s account, including the payments that are waiting to be cleared.


Understanding pending transactions is key to effectively managing your bank balance

When you are familiar with this concept, you can confidently keep track of how much funds you have available in your bank account, enabling you to plan your purchases without risks of unexpected situations.

Frequently Asked Questions

Yes, pending transactions for a purchase made with a credit card will put a limit on your credit card balance. On the other hand, a debit card pending transaction will limit the money in your account. This could create difficulties, especially for those who have upcoming bills.

Cancelling a pending transaction is sometimes a challenge and cannot be guaranteed. However, businesses can contact card issuers and request that the transaction be reversed, enabling the user to receive back their funds before they reach the merchant’s account.

This depends on several factors, including the payment method, the processes and necessary time for processing of the financial institution, the recipient’s policies, and more. Some pending transactions last less than a day, while others can extend to seven days.

Once a pending transaction is processed and completed, it will disappear from the account and will no longer appear as “pending”. Other factors for the disappearance of pending transactions include the expiration of the authorisation period or the merchant cancelling the transaction.

Generally, it’s not recommended to spend money linked to a pending transaction. The funds may be taken from the account after the transaction has been processed and completed, leaving you with less money in your balance. Let the pending transaction be processed and the amount deducted from your account before making new purchase decisions.

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