How do banks have so much money to process all there CC transactions?

Question

Every time people use their credit cards, the bank has to send the money to the merchant at some point. Most people pay their CCs at some point but while the banks wait for that, how are they able to credit the merchant?

In: 1

Answer 1

Every credit/debit card account is a ledger entry with a corresponding balance. With a debit card it’s the balance in your account, with a credit card it’s the amount that’s been credited to your account. Multiply those balances by tens of millions of consumers.