Settlement

Settlement is when the money actually reaches your bank, which is not when the customer paid. A card payment is authorised instantly, captured when you take the money and settled on a schedule - commonly a day or two later, sometimes weekly, and longer on a new account while checks are completed. The gap is a cash-flow question rather than a technical one.

In practice

Settlement is the payout. A card payment is authorised instantly, captured when you take the money, and settled to your bank on a schedule — commonly a day or two later, sometimes weekly, and longer for a new account while checks are completed.

The gap is a cash-flow question rather than a technical one, and it catches out shops moving from an aggregator that paid weekly to their own payments that pay daily, or the other way round.

Reconciling matters too: the payout is usually a net figure after fees and refunds, so matching it back to individual orders needs the provider’s settlement report rather than the order list.

Also called: payout, settlement period.

Questions people ask about settlement

Why has the money not arrived yet?

Because authorisation, capture and settlement are three different events. The payment can be approved instantly and still be a day or two from your bank, and a new merchant account often settles more slowly while checks are completed. Your provider’s settlement schedule is the document that answers it.

How do I reconcile a payout against orders?

With the provider’s settlement report rather than the order list, because the payout is normally a net figure after fees, refunds and chargebacks. Matching a net payout to gross orders by eye is how an afternoon disappears, and it is the part worth automating first.

Does settlement timing matter when leaving an aggregator?

More than people expect. Shops moving from weekly marketplace payouts to daily settlement on their own payments - or the other way round - get one odd fortnight of cash flow, and it is worth knowing about in advance rather than discovering it on a rent day.