How a provisional credit works
The customer reports a transaction. The issuer credits the amount, then tries to recover it from the merchant's side through a chargeback, which the merchant may contest.
Until that is settled the credit is the issuer's own money. If the merchant wins, or the claim turns out to be unfounded, the issuer can debit the amount again after telling the customer.
What the rules say about provisional credit
The term comes from the United States. Under Regulation E, a financial institution that needs more than 10 business days to investigate an error on an electronic transfer must provisionally credit the account within those 10 days, and may then take up to 45 days. When the institution debits a provisional credit, it must notify the consumer and keep honouring payments to third parties for five business days.
EU law does not use the term. Article 73 of PSD2 has the payer's provider refund an unauthorised payment immediately, and no later than the end of the following business day, unless the provider has reasonable grounds to suspect fraud and reports them to the national authority.
Scheme rules add their own deadlines: the Visa Core Rules of 18 April 2026 set them for issuers outside Europe, by region and card product.
Why provisional credit matters to a card issuer
The issuer is out of pocket for as long as the dispute runs, and for good if no chargeback right exists. The ledger has to mark the credit as conditional and link it to the dispute, and the customer has to be told that a refund can be reversed.
Where a provisional credit shows up in a platform
Modules that do the work
- Card issuingVirtual and physical cards, wallets and controls, on the issuer processor you choose.
- LedgerThe double-entry book of record behind every balance, fee and transfer.
- Fraud & riskReal-time fraud scoring, limits and case management, with the risk engines you already trust.
- NotificationsEmail, SMS, push and in-app messages in your brand, through the providers you choose.
Platforms that need it
Where it is written
The laws and standards this page's facts come from.
- Regulation E, 12 CFR 1005.11, procedures for resolving errors (Consumer Financial Protection Bureau)
- Directive (EU) 2015/2366, PSD2, Article 73 (EUR-Lex)
- Visa Core Rules and Visa Product and Service Rules, 18 April 2026: section 4.1.11
General information, not legal advice: what applies to you depends on your services and your market.