Settlement (Card Payments)

Settlement in card payments is the process of transferring cleared transaction funds from acquirers to merchants after authorization and clearing, net of fees, chargebacks, and rolling reserves.

Also known as: card settlement, payout settlement

Updated Aug 28, 2026by WeiJun Tang, SEO

Clearing vs settlement

Clearing exchanges transaction details; settlement moves money according to net totals.

Payout timing

Settlement cycles may be T+1, T+2, or faster depending on region and acquirer product.

Sources

  1. Visa clearing and settlement
  2. Mastercard settlement services

FAQ

  • No. Authorization reserves funds; settlement and payout follow clearing cycles.

Related terms

Explore related definitions

  • Payment Facilitator (PayFac)

    A payment facilitator aggregates many sub-merchants under one master merchant identification, enabling platforms to onboard sellers quickly while the PayFac manages underwriting, compliance, and settlement on their behalf.

    Payment Facilitator (PayFac)

  • Merchant Acquirer

    A merchant acquirer is a licensed institution that underwrites merchants, routes card transactions to card networks, settles funds to merchant accounts, and manages chargeback and compliance obligations.

    Merchant Acquirer

  • Chargeback

    A chargeback is a forced reversal of a card transaction initiated by the cardholder through their issuer, usually citing fraud, non-delivery, or billing disputes, and debited from the merchant through the acquirer.

    Chargeback

  • Payment Gateway

    A payment gateway is the technology layer that captures checkout payment details, routes authorization requests to acquirers or processors, and returns approval or decline responses to the merchant application.

    Payment Gateway

  • PCI DSS

    PCI DSS is the Payment Card Industry Data Security Standard—a set of security controls merchants and service providers must follow when storing, processing, or transmitting cardholder data.

    PCI DSS

  • 3-D Secure (3DS)

    3-D Secure (3DS) is an cardholder authentication protocol that adds a step-up challenge during online checkout so issuers can confirm the payer before authorizing high-risk transactions.

    3-D Secure (3DS)

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