How long does a merchant have to process a credit card transaction?

Demystify credit card processing for businesses. Learn timeframes, prevent chargebacks, and optimize transactions with Swipesum's expert help.

If you’re a business owner, you’re concerned with two main things: ensuring you provide your customers with a great experience with products and services they want and the bottom line. And though you’d love to only worry about the former, you know that you’ve got to keep an eye on the latter even more closely. 

So, you’re probably curious how long you have to process a credit card transaction. Moreover, your customer is definitely curious since it’s their card getting charged. Here, we’ll take a look at how long you (the merchant) have to process a credit card transaction, why it can vary, and some ways you can possibly speed things up.

Credit Card Processing

Before we dive in, a quick primer on credit card processing. Your customer comes into your store, browses, and decides to buy three widgets. They swipe their card at your point-of-sale terminal. Your payment gateway contacts their bank and says, “Hey there, Steve is trying to buy three widgets for $100 - this cool?” and their bank will either say, “Yep, go for it” or “No way.”

Assuming the transaction goes through, you’ll get an authorization message, and Steve will take his widgets home with him.

To boil it down, your merchant account - the one you set up to handle your payments - and the customer’s bank account will reconcile the transaction, and money will exchange hands. Let’s get specific for a second; you can break this process into two parts; at the shop and behind the scenes

At the Shop

The steps below occur in a matter of seconds, generally before the customer removes their card from your POS.

  1. Initiation - The customer initiates a purchase by providing their credit card details to the merchant.
  2. Authorization - The merchant's POS system or online payment gateway sends an authorization request to the acquiring bank (the bank that processes the merchant's credit card transactions).
  3. Acquiring Bank's Approval - The acquiring bank forwards the authorization request to the credit card network (such as Visa, MasterCard, etc.) and routes it to the customer’s bank.
  4. Issuing Bank's Response - The issuing bank evaluates the authorization request and sends an approval or denial response back through the credit card network to the acquiring bank.
  5. Authorization Response to Merchant - The acquiring bank relays the authorization response to the merchant's POS system or payment gateway and if approved, the funds are set aside in the customer's credit card account.

Behind the Scenes

These items occur in the moments after the transaction is approved and as long as days after the initial transaction took place.

  1. Batching - Throughout the day, the merchant accumulates authorized transactions and submits them to the acquiring bank in a batch.
  2. Clearing - The acquiring bank forwards the batched transactions to the credit card network for clearing.
  3. Note, this is different then the approval above - it actually processes the entire transaction and will include tips, additional fees, etc.
  4. Credit Card Network Processing - The credit card network processes the transactions, deducts fees, and routes the funds to the acquiring bank.
  5. Funding - The acquiring bank deposits the funds into the merchant's account.

So how long?

Well, the “At the Store’ items take place almost immediately, while the Behind the Scenes items generally take anywhere from a few hours to a day or two. There are a few factors that can make things take a bit longer:

  • International: If the customer presents a credit card from another country, the transaction process can be longer as the payment network deals with transaction fees, exchange rates and more.
  • Large batches: If it’s a high volume business or at a very busy time of year, like during the holiday season, batching may take longer.
  • Service interruption: Just like anything else, if the internet is down somewhere along the line, things can take longer.

Generally speaking, credit card issuers don’t have a time limit for charging a customer’s credit card. The issuing banks, however, will often impose a limit on merchants for charging. These limits can range anywhere from three to 30 days. 

Other time limits

There are some other key time limits that merchants need to be aware of, like when you need to batch your charges (often by the next day) and when you can expect money in your account (anywhere from 3-7 business days). One of these limits that merchants would rather not deal with is the time limit dealing with chargebacks. Most credit cards offer the customer’s the opportunity to process a chargeback if they did not receive a product or service or it is substantially different than what they expected. The time limit can vary depending on the credit card. With Mastercard, for example, merchants have 45 days at each stage of the chargeback process to respond. This means that when a customer processes a chargeback, a business has 45 days to present evidence that the charge is valid. American Express only allows 20 days and customers have 120 days in which they can file a chargeback.

Chargebacks are expensive to defend against both in time and fees - its best to avoid them all together by processing your transactions quickly.

Is there a law?

Not really. Best practice says that you should process your transactions quickly. Waiting increases the risk of a chargeback or returned merchandise. Further, it’s your own money you’re leaving on the table - the longer you wait to process transactions, the longer you’re waiting to get paid.


Don’t be! Credit card processing, chargebacks and time limits can be difficult to manage. After all, there are a whole host of rules and regulations that you need to keep track of and all you want to do is run your business. That’s why Swipesum is here to help. Our suite of tools and experts can help ensure your business is set up for success from the first card swipe to your hard earned profits hitting your bank accounts. If you want help understanding the time limits involved with your customers, need a better grasp on your statements or just want someone to bounce some ideas off of, we’re here to help.

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Michael Seaman

Michael Seaman

Michael Seaman is the co-founder and CEO of Swipesum. A veteran of the payments industry and former employee at one of the largest payments companies, Michael, along with his brother Stephen, has led Swipesum since its inception in 2016. Swipesum is committed to providing innovative payment solutions and exceptional service to its diverse clientele. In his free time, Michael enjoys traveling with his wife Kelsey and their three children, pole vaulting, and engaging in typical Midwestern dad activities.

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