What is settlement?¶

Settlement is completion of the financial obligations between institutions involved in a payment. It can occur after customer approval and differs from the time a user acted or first saw the transaction.

Approval can precede final financial completion¶

A card issuer may authorise and reserve funds before the merchant submits the payment for settlement. Transfers can appear promptly in an interface while institutions continue reconciliation. Timing varies by method, currency and system.

Settlement may be individual or aggregated into merchant batches. International routes can introduce intermediaries, fees and exchange-rate records. Dates for transaction, authorisation, posting and settlement may therefore differ.

Use settlement for the institutional event¶

Preserve settlement references, batch and clearing data, amount and currency, fees, receiving institution and linked transaction or authorisation IDs. Ask what “completed” means in the particular source.

Settlement can confirm completion between institutions but does not identify the user or necessarily show when the recipient first accessed value.