Settlement
Settlement is the process of transferring funds from the cardholder's bank to the merchant's bank account after a payment transaction is authorized. Settlement timing varies by processor and can range from same-day to several business days.
Key Details
- Gross settlement pays the full transaction amount, with fees deducted separately
- Net settlement deducts processing fees before depositing funds to the merchant
- Settlement cycles vary: T+1 (next day), T+2, or weekly batches depending on processor
- Settlement reconciliation matches individual transactions to bank deposits accounting for fees