What is settlement in payments?
Settlement is the process where funds from a completed transaction are transferred from the issuing bank to the merchant’s account.
How does settlement work?
After authorisation and clearing, funds are moved through the payment network and deposited into the merchant’s account, usually after fees are deducted.
How long does settlement take?
Timing varies depending on the provider and payment method, though it often takes one to several business days.
Why is settlement important?
It determines when a merchant actually receives funds, which directly impacts cash flow and financial planning.
What factors affect settlement speed?
Factors include payment method, provider policies, banking systems, and whether the transaction is domestic or cross border.