Settlement

What is Settlement?

Settlement is the final stage of the payment process where funds are actually transferred from the issuing bank to the merchant’s bank account. It occurs after the transaction has been authorized, captured, and cleared.

The timing of settlement can vary from a few hours to several days, depending on the payment method and the processor. It is the moment when the merchant’s sales are converted into accessible cash.

Why It Matters

• Represents the actual receipt of revenue for the merchant

• Determines the cash flow and financial health of a business

• Involves the deduction of all processing and interchange fees

• Essential for reconciling daily sales against actual bank deposits