This article is applicable to you if you have access to Mastercard Real-time Feed. To learn more about how to get access to this feature, you can read this.
It is useful to understand how credit card processing works. Please read this Forbes article that explains it in detail. Simply put, there are two distinct operations that happen when after you swipe your credit card:
Authorization: This happens as soon as you swipe the card. The card details and purchase amount are verified and authorized by the issuing bank. Fyle creates an expense based on the authorization amount at the time of swiping
Settlement: The second stage of credit card processing—settlement—happens among the merchant, acquiring bank, card network and issuing bank. This can happen up to 14 days after authorization. The settlement amount may be different from the authorization amount. Fyle automatically changes the expense amount once settlement information comes in.
Here is a diagram describing what happens when Fyle receives authorization and settlement calls. When the settlement amount is different from the authorization amount, Fyle automatically updates the expense amount.
Caveat: if the expense has already been submitted as part of a report AND the report has been approved, then the expense amount does not get updated. We also skip the creation of an expense for an authorization amount of $1.
In some cases, an authorization comes through, but the transaction gets canceled before settlement happens. E.g. you buy something at the store and return it within a couple of hours because you don't need it. In this scenario, the settlement calls never comes for the corresponding authorization. In this scenario, Fyle will automatically delete the expense after 15 days. Caveat: if within this period, the expense was added to a report, then it will not get deleted
Sometimes, you may return an item to a store after the original transaction was settled. This would show up as a negative expense in Fyle.
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