Glossary
Funding
"Funding" refers to the process by which merchants receive payment for transactions they have processed. After a customer makes a purchase using a credit or debit card, the merchant submits the transaction details to their acquiring bank or payment processor. The payment processor then handles the transaction by routing it through the appropriate card network (such as Visa, MasterCard, American Express, etc.) to obtain authorization from the customer's issuing bank.
Once the transaction is authorized and processed, the funds are transferred from the customer's bank to the merchant's bank. However, these funds are typically held in a temporary account until the payment processor or the acquiring bank disburses them into the merchant's actual business bank account. This final transfer of funds into the merchant’s account is what is specifically referred to as "funding."
The funding process can vary in duration, generally taking anywhere from one to several business days, depending on the payment processor and the terms of the merchant's agreement. This time allows for the necessary financial reconciliations and fraud checks to be completed before the money is fully available to the merchant.