I don't know how Costco does it, but if you use tap to pay or insert your card into the chip reader while the cashier is scanning your items, at the end when the cashier presses the button to indicate they are finished scanning, it instantly says "approved" and prints a receipt.
Costco is the only place where I've seen this. I don't understand how it gets an authorization for any amount that fast, since it can't know the total while the cashier is still scanning items, and it's Costco, so it could be anywhere from $50 to $5,000 so surely it's getting the authorization after the transaction finishes? The flow is almost perfect. I have them scan my Costco membership, I use tap to pay on the card reader, then I or 2nd cashier move to organizing the items into the cart, and then the cashier hands me a receipt with basically zero wasted time.
Costco has an advantage over everyone else -- they already know who you are before your purchase is complete. By scanning your membership card, they already have your average purchase profile.
They actually ask the credit card processor to approve you for $avg + X%, so as long as your purchase comes in lower than that, you've already been approved. If you make a really big purchase it will take a little longer, because they go back for a second auth for the bigger amount.
It's also why you'll see some people making $700+ purchases without having to sign anything -- because Costco already knows they do that every week and pay the bill on time so they assume part of the risk.
Citibank bent over backwards to get Costco. A few years ago Amex was the only card you could use at Costco. Citibank agreed to not only make a new card with better rewards to compete with Amex, but they agreed to honor all the reward points too. They just rolled over from Amex.
I'm sure Costco got a deal that gives them nearly at cost processing and a bunch of other stuff.
It was worth it for Citi too. The moment I got my Costco Amex replaced with a Costco Citi, the Citi became my primary card, because everyone takes Visa.
Walmart sometimes gives me the "approved remove card" notification BEFORE the cashier has finished ringing up the purchase; I assume they've made a deal that lets them do that.
Costco is the only place where I've seen this. I don't understand how it gets an authorization for any amount that fast, since it can't know the total while the cashier is still scanning items, and it's Costco, so it could be anywhere from $50 to $5,000 so surely it's getting the authorization after the transaction finishes? The flow is almost perfect. I have them scan my Costco membership, I use tap to pay on the card reader, then I or 2nd cashier move to organizing the items into the cart, and then the cashier hands me a receipt with basically zero wasted time.