Authorization first: When you swipe or tap, the merchant’s bank (acquirer) sends an authorization request to your card issuer.
Instant approval: The issuer checks your account balance/credit limit and responds within seconds.
Hold placed: The amount is immediately “held” against your account, so it looks instant even though final settlement happens later (usually overnight).
Reverse flow: A refund is not just “undoing” the transaction. The merchant has to initiate a new credit transaction back to your card.
Batch processing: Refunds are sent through the same card networks but often in daily batches, not instant authorizations.
Settlement cycles: The money flows back through multiple banks (merchant → acquirer → card network → issuer → your account). Each step can take 1–2 business days.
Bank posting delays: Even after the issuer receives the refund, your bank may take extra time to post it to your account.
Net Effect
Payments: Instant authorization + hold → looks immediate.
Refunds: Multi‑step reversal + settlement → can take up to 7–14 days depending on banks and merchant speed.
