Glossary
What is settlement in payments? Meaning, timing and payouts
Settlement is the step in which funds actually move to discharge a payment obligation: between the issuer, the card scheme and the acquirer, and then from the acquirer or provider to the merchant's bank account. It follows authorisation and clearing. Settlement timing depends on the method and the provider, from seconds for instant transfers to several business days for cards.
- Settlement
- The final transfer of funds that discharges a payment obligation between the parties, as defined in the BIS CPMI payments glossary.
How is settlement different from authorisation and clearing?
Authorisation approves a payment, clearing exchanges and reconciles the transaction details and the amounts owed, and settlement moves the money. A card payment can be authorised in seconds but settle to the merchant days later.
How long does settlement take?
It depends on the payment method and your provider's payout schedule.
- Card payments: batched by the acquirer, with payouts usually on a schedule of one or more business days.
- SEPA Instant Credit Transfer: settled in seconds between banks.
- SEPA direct debit: collected on the due date, with a refund right for the payer.
- Wallets and local methods: according to the provider's terms.
How do you reconcile settlements?
Match each payout to the transactions, refunds, chargebacks and fees it contains using the provider's settlement report. OrsunPay is a payment orchestration platform: you keep your own contracts with licensed providers (for example Stripe, Adyen or Worldpay), and OrsunPay is not a payment institution, acquirer or merchant of record and does not hold or transmit funds. OrsunPay brings settlement and payout data from your connected providers into one reporting view. For OrsunPay pricing, see the pricing page at /pricing.
Frequently asked questions
Is settlement the same as a payout?
Not exactly: settlement moves funds between financial institutions; the payout is the transfer of the settled net amount to your account.
Why is a settlement amount lower than sales?
Because providers deduct fees, refunds, chargebacks and sometimes reserves before paying out.
What is a settlement report?
A provider file listing every transaction, fee and adjustment included in a payout.