Memo Posting

Memo-posting is a terminology used in traditional computerized banking environment where batch processing is employed. It represents temporary credit or debit transaction/entries made to an account for which the complete posting to update the balance will be done as part of the EOD(end-of-day) batch processing. The temporary transaction created as part of the memo-posting will be reversed/removed after the actual transaction is posted in batch processing.

Some modern banking system implement Real-time Posting.

Examples:

1. A customer receives an electronic credit to his account with current day as effective date. The actual transaction for this entry will be made at EOD in batch posting. In order to access his electronic credit for which he is eligible by rules, the bank creates a temporary "memo" credit to increase the balance available (withdrawal). Later this entry will be removed as part of the EOD batch process.
2. The actual transaction to record a withdrawal using ATM will be posted to accounts in the EOD batch. In order to prevent her from overdrawing her account later in the day, the amount of the cash withdrawal is memo-posted as a charge to her account until the transaction actually posts in the batch update that evening.