When a purchase is made with an active Merchant, the bank or financial institution that processes payments on behalf of the Merchant needs to confirm with your credit card issuer that your account has the appropriate funds. To do this, the transaction data is provided from the Merchant's processing bank to your credit card issuer. Following this passing of data, a funds validation process occurs in 2 stages.
The first stage is referred to as an Auth transaction. This transaction type is initiated at the time you make a purchase and in most cases will allow you to view the transaction in your transaction list instantaneously; however, only half of the transaction validation is undertaken upfront.
The second stage is referred to as a Cleared transaction. This transaction type takes 3-5 business day and ensures completion of the transaction validation.