How Long Does a Credit Card Payment Take to Process?

If you’re reading this, stop checking your bank account. Mashing refresh on your computer will not speed up your customers’ credit card payments or get you paid any sooner. Understanding how credit cards work will help you manage your cash flow and prepare for delays that might happen during purchases.

Credit card payments take a few days to process. They need to be authorized, settled, and funded. That takes time, depending on your payment software and the bank that you work with.

In this post, we’ll tell how long it takes to process a credit card payment. I’ll walk you through the payment process and provide tips for getting paid quickly. I’ll also highlight factors that can delay a credit card payment and what to do if yours doesn’t process on time. Let’s get started.

The main factor to consider is timing. When did you complete the payment? Was it a holiday? Was the business day almost over?

Your payment software will start processing immediately, but most financial institutions only process payments before 5 p.m. Anything after that will be processed the following business day. So, if it’s a holiday, your payment won’t process until the bank opens again.

Payments are something you want to monitor closely as a business owner. Getting paid on time keeps your cash flow steady and helps you make big purchases. If you’re constantly waiting for payments, taking advantage of timely sales and marketing opportunities is hard because your money is tied up elsewhere.

The first step to speedy payments is understanding how credit cards work. Let’s explore that in the next section.

How do credit card payments work?

Here’s a beginner’s guide that explains how credit card payments work.

1. The customer uses their credit card.

Credit card payments are initiated when customers use their cards to buy something. They usually use a card reader at your store (or on your phone) to complete their payment.

2. The payment processor creates an authorization request.

After the customer swipes their card, your payment processor creates an authorization request. This request is sent to the customer’s bank to confirm that they have the funds to complete the payment.

3. The authorization request is sent to the credit card network.

The authorization request has now been sent to the credit card network. This company forwards the request to the customer’s bank account for approval and confirmation.

4. The customer’s bank responds to the request.

Once the request reaches the customer’s bank, it’s approved or denied. Once approved, the transaction is authenticated to ensure the card is legitimate and used legally. Funds are then put aside, and the payment is charged to the customer’s account.

Remember: Steps 2-4 typically take a few seconds to complete. Customers can walk away with their purchase because their bank confirms there’s money in their account.

5. Funds are collected from the customer and sent to the business.

When an authorization request is approved, money is sent to your business from the customer’s account. This step is called the settlement phase. Businesses typically pay a fee to their payment processor for handling the transaction. These fees vary, but most range between 1.5% and 3.5% of the payment.

What does “processed pending” mean?

If you see a payment as “pending,” that means it’s authorized but not yet complete. The transaction was approved, but the bank still needs to finalize it.

The settlement phase takes the most time to complete. Your approved authorization requests are sent back to the credit card network, which forwards everything to the customer’s bank to complete the purchase.

There are a few things that can delay this last step. Let’s discuss them in the section below.

What can delay credit card payments?

Here are four things that can delay credit card payments:

• Batching: Most credit card processors don’t handle payments individually. Businesses send payments in batches, so multiple payments are completed at the same time. This step can happen every day or a few times each week.
• Timing: Timing matters a lot. Payments are processed on workdays before 5 p.m. Transactions completed after that time or during holidays are processed on the following business day.
• Security: Some transactions are investigated to avoid fraud. Credit card companies may take a day or two to look into larger purchases that have a bigger impact on their business.
• Inaccurate Information: Payments can be delayed if the customer submits inaccurate information, like a wrong credit card number or billing address. This delay typically happens with online payments.

Now that you know what delays your credit card payments, let’s talk about how to get paid faster.

How to Process Your Credit Card Payments Quickly

Here are three steps you can take to get paid quickly.

1. Set up automated payments.

The best way to ensure you get paid on time is to use automated payments. It will create a consistent payment schedule that’s easy to monitor and track.

For example, if you often work with the same customers, ask them to set up automated payments for the first day of each month. These payments will all be submitted on the same day, so you know you’ll get paid between the 2nd and 4th of the month (barring any issues, weekends, or holidays).

Your payment processing software can help you set up automated payments. It will ask you how much you want to charge and how often you want to schedule this payment. You can also add invoice numbers so customers can see a breakdown of what they’re paying for.

Not only is this consistent, it’s convenient, too. You don’t have to manually schedule payments. Instead, your payment processor handles the communication automatically, so you get paid quickly.

2. Plan for bank holidays in advance.

Your payments won’t process on bank holidays, so it’s important to plan for these dates throughout the year.

Look at the calendar at the beginning of the month and check for bank holidays. Then, schedule payments a few days before or right after those dates.

For example, in November, there’s Thanksgiving. If you want to get paid sooner, schedule payments a week before the holiday. Or wait until after Thanksgiving so there’s no delay in the payment process.

It’s also a good idea to contact your payment processor’s support team. They can explain how payments operate around the holidays and estimate when they will be completed.

3. Confirm you have the correct payment information.

One of the biggest obstacles to getting paid quickly is ensuring you have the right payment information from your customers. One wrong number will delay the entire process. When gathering payment information, especially over the phone, confirming everything is correct is essential.

Read the information back to the customer and complete the transaction while they’re still on the phone. That way, you won’t have to call them back to troubleshoot issues with their payment.

There are times when a credit card payment doesn’t process. Let’s review what you should do in those situations as well.

What do you do if your credit card payment doesn’t process?

If a credit card payment hasn’t been processed within three business days, your best bet is to call your payment processor and bank. Specify the transaction and ask them what the delay is. They’ll tell you if you need to do anything on your end.

For example, they may tell you there’s a problem with the customer’s account. In that case, you will have to reach out to the customer and let them know their payment didn’t go through. You could ask for a different form of payment so the same issue doesn’t happen again. Or, the customer can call their credit card company and settle the issues with their account.

If a credit card is declined immediately, you can also check its decline code. This two-digit code indicates why the transaction was declined. Here’s a list of common decline codes and what they mean:

Code Number	Code Label	Description
05	Do Not Honor	This transaction may potentially be fraudulent. Call the bank for more information.
14	Invalid Card Number	The card number is incorrect. Try entering the information again.
41	Lost Card	The card has been reported lost. Ask the customer to provide another form of payment and return the card if they ask for it.
43	Stolen Card	The card has been reported stolen. If possible, keep the card. Ask for cash payment and report the transaction immediately.
51	Insufficient Funds	The customer’s account does not have enough money to complete this payment. Ask for another form of payment.
54	Expired Card	The card is expired. Ask for a different card or form of payment.
57	Transaction Not Permitted	The credit card company denied the transaction. Ask the customer to call their provider to find out why.
61	Exceeds Withdrawal Limit	The customer has overdrawn their account or reached their withdrawal limit. Ask for a different card or form of payment.
63	Security Violation	The customer entered the CVV code incorrectly. Try submitting the payment again.
65	Activity Limit Exceeded	The customer has exceeded their credit limit. Ask for a different card or form of payment.
85	No Reason to Decline	The purchase didn’t process, but there’s no clear reason why. Try the payment again and contact your bank if the issue persists.
86	Cannot Verify PIN	The customer’s PIN was incorrect. Try the payment again and contact your bank if the issue persists.
91	Issuer or Switch Unavailable	There was a technical error in the process, and the payment didn’t go through. Try the payment again and contact your bank if the issue persists.
93	Violation Cannot Complete	The credit card company has flagged the customer’s bank account. Ask the customer to call their bank or provide a different form of payment.

Tip: Most processors will still charge you for declined payments. It’s better to use a different form of payment than to keep trying the same card.

Process Your Business Payments Quickly

Business owners need to get paid on time, and the best way to ensure that is to stay on top of your banking and finances. While credit cards may take time to process, you can schedule payments around the holidays and weekends or accept other forms of payments to get paid on time. If you run into issues, double-check your decline codes, and don’t be afraid to call your bank or payment software provider for help.