Sometimes, it’s the little things that create the biggest frictions.
“Pending” charges are a staple of day-to-day financial life, but they can sow confusion for consumers. Every transaction, of course, has its steps and its chain of command.
Wield a card at the point of sale — online or at a brick-and-mortar merchant — and things are set in motion: The bank authorizes the transaction, but the journey towards final settlement can take days, as the merchant captures the sale and the networks behind the scenes clear and settle those transactions.
The consumer sees that “pending charge” on the statement and is never quite clear on what is “open to buy” on their credit card, or what funds are available to spend on their debit instruments. The long road between authorization and final settlement is the gap that has bedeviled card payments for decades as an anachronism of the banking system itself.