Most merchants funds will be held for a number of days before disbursing. These are called hold days. Hold days do not include settlement or disbursement data transit times within the banking system, weekends or holidays.
If for example, if a merchant has 3 hold days and they run a transaction a Friday after cut-off time, it will not settle until the following Monday. 3 full days hold are then applied on Tue, Wed and Thurs of the following week. On Friday, the disbursement file will be transmitted to the banking system where it should post the following business day by the merchant's bank. This will typically be the following Monday. In this example, the merchant had 3 hold days but it took 10 calendar days to receive funds after processing the transaction.
Any bank holidays that occur along this timeline are not counted as either hold days, settlement or disbursement days for purposes of determining when merchants should expect to see deposits posted to their bank account.
If merchants want to reduce hold days, they may be eligible to increase their cash deposit which is held in reserve for them. This would be requested by the merchant directly through their service provider's underwriting team. The reason we have hold days is in case the transactions are charged-back by the bank or by the merchant's customer. For most types of chargebacks, the time limit falls within 3 days. The exception is chargebacks for unauthorized debits or fraud.