Looking forward, I think the only real progress will be made when banks, who are taking the risk of forced overdrafts when they don't get paid, push the card system operators (you know who you are!) to make fundamental changes in the way debit (and credit) card transactions are processed. The two-day or longer delay in posting transactions is a relic of the old paper ("knuckle-buster") sales draft process that required actual paper deposit of drafts. Authorization was handled by telephone and settlement resulted from processing paper. The authorization step has been converted almost entirely to electronics with the widespread use of electronic terminals, and paper drafts have (largely) gone the way of the dinosaur, but the batch-processing delay is still built into the system. MasterCard and Visa could eliminate a lot of the delays if they would upgrade their infrastructure so that once the sale is finalized (with a signature or a PIN) the transaction is transmitted back to the card issuer for posting (as it is in the ATM/PIN-debit world already).
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8