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The 3 Second Sandwich: How do card networks work?

46 pointsby jhuckesteinover 9 years ago

2 comments

pbreitover 9 years ago
I know we always scoff how how supposedly slow and poorly the payment networks work but considering they've been pretty solidly transferring trillions of dollars over the past 60+ years, I think we should give them a little more credit (no pun). "Real-time" payments are cute but not really all that necessary in reality.
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the_mitsuhikoover 9 years ago
&gt; Approximately 48 hours later, the Card Network (Visa, MasterCard, AmEx etc) will group together all the payments from a given time period and send them to the Card Issuer as a batch “Presentment” file. There might be thousands of payments in this file. At this point, the Card Issuer will debit the money from each of its customers’ accounts according to the Presentment file and make a bulk payment to the Card Network for the entire Presentment amount. In turn, the Card Network will divide up the funds and distribute the money back to the appropriate Card Acquirers, who will distribute it to their merchants in turn.<p>As someone who has cards that settle after ~48 hours and cards that reflect the state of transactions immediately I can clearly state that I heavily prefer the former. The reason for this is that many transactions are not that simple and you end up with a ton of spam on your statements.<p>I like what Lloyds does where it shows transactions not fully settled yet in a separate section in the panel.<p>Number26 uses any auth message in the log and it&#x27;s a nightmare when you travel and later try to consolidate your bills with your credit card statements.
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