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As money travels from your PEX account to the merchant where the card is presented, the transaction will change states. A successful transaction has two stages:
  1. Authorization
  2. Settlement

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Authorization

When a PEX card is presented at the point of sale, the merchant’s POS system will send the payment request through the VISA (or Mastercard) network to PEX. PEX will confirm that the payment method is legitimate and that the cardholder has sufficient funds in their account to pay for the product or service.  Once the transaction is authorized, PEX puts a hold on the funds on the cardholder’s card account so the funds cannot be used for other purchases. The funds are not actually removed from the cardholder’s account at this time but “earmarked” for this purchase. Authorized transactions will appear as Pending in the PEX dashboard.

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Settlement

After providing the goods or service to the cardholder, the merchant will submit the transaction for settlement. The amount of time between authorization and settlement can differ by merchant and time of purchase. Some merchants submit settlements at the close of the business day, however holidays and other factors may affect the timeline for settlement. Most transactions are settled within 5 business days. The final amount submitted for settlement may differ from the amount authorized as it may include additional authorized charges (such as tips or other incurred charges). Note that not all authorizations will have settlements. Sometimes a merchant will process an authorization, but if the purchase is not completed, they will either reverse the authorization (common) or let it expire (uncommon). At the time of settlement, funds are withdrawn from the PEX cardholder’s account and the transaction will display as settled. Learn more about this topic in the Card Transactions section of the PEX Knowledge Base.
Last modified on April 22, 2026