Clearing

What is Clearing?

Clearing is the process where an acquiring bank and an issuing bank exchange the information necessary to settle a transaction. It involves verifying the transaction details and calculating the final amount to be transferred, including fees.

This stage happens after the transaction is captured but before the actual funds are moved. It ensures that both financial institutions agree on the transaction details before the final settlement occurs.

Why It Matters

• Validates the accuracy of transaction data between different banks

• Calculates the interchange fees and other costs associated with the payment

• Prepares the transaction for the final transfer of funds during settlement

• Helps identify and resolve discrepancies before money changes hands