What Is a POS Deposit on a Bank Statement?

A “POS deposit” on a bank statement reflects the culmination of electronic payment transactions. Understanding this term involves recognizing how businesses process card payments and how those funds ultimately arrive in their bank accounts.

What a POS Deposit Represents

A POS deposit originates from transactions conducted at a “Point of Sale,” the location where a customer makes a payment for goods or services. This encompasses sales made using credit cards, debit cards, or other electronic payment methods, whether at a physical storefront or through an online checkout.

These deposits represent the collection of multiple individual electronic payments. Instead of each card swipe or tap appearing as a separate deposit, businesses typically group these transactions together. This process, known as batching, prepares the day’s electronic sales for transfer into the merchant’s bank account.

A POS deposit signifies the total amount of funds received by a business from its electronic sales, after these transactions have been batched and are ready for settlement.

How POS Deposits Are Processed

The processing of a POS deposit involves several interconnected steps, beginning with the customer’s payment at the point of sale. When a customer uses a credit or debit card, the transaction details are captured by the merchant’s payment terminal or gateway. This information is then encrypted and sent as an authorization request to the merchant’s acquiring bank or payment processor.

The acquiring bank, a financial institution that processes card transactions for merchants, forwards this request through the appropriate card network, such as Visa or Mastercard. The card network then routes the request to the customer’s issuing bank, the bank that issued the credit or debit card. The issuing bank verifies the card’s validity, checks for sufficient funds or credit, and assesses any potential fraud risks before approving or declining the transaction.

Upon approval, the issuing bank sends a confirmation back through the card network to the acquiring bank and ultimately to the merchant. At the end of a business day, the merchant typically sends all authorized transactions as a “batch” to their payment processor for clearing and settlement. This batching process allows for the efficient transfer of funds.

During the settlement phase, the card network facilitates the transfer of funds from the issuing bank to the acquiring bank. Subsequently, the acquiring bank deposits the funds into the merchant’s designated bank account, typically after deducting any applicable processing fees. This entire process, from transaction authorization to funds becoming available in the merchant’s account, generally takes one to three business days.

Recognizing POS Deposits on Statements

Identifying POS deposits on a bank statement is generally straightforward, as financial institutions use specific descriptors for these transactions. Common labels you might encounter include “POS,” “POS DEP,” “Card Settlement,” or “Merchant Deposit.” These abbreviations or phrases indicate that the funds originated from electronic sales processed through a point-of-sale system.

The timing of these deposits can vary depending on the payment processor, the bank, and the day of the week. While transactions are authorized instantly, the actual funds typically become available in a business’s bank account within one to three business days after the transaction date. Weekends and bank holidays can extend this timeframe, as processing generally occurs on business days.

To reconcile these entries, businesses should match the deposit amounts on their statements with their internal records of electronic sales batches. Bank statements often include additional details alongside the “POS” label, such as the merchant’s name or a unique transaction ID, which can assist in identifying the specific source of the deposit. This helps in maintaining accurate financial records and ensuring all expected funds have been received.