Settlement Explained


A lot happens between when a customer pays for a product or service and the money is deposited into the business owner's account.

No one likes waiting for money to be added to their bank account, but have you ever wondered how it happens? Settlement is how funds transfer from the customer to the business owner. It can take a day or up to a week depending on various factors.

The settlement cycle:

  1. When a customer pays by credit card, either online or through a point of sale, the business owner receives a record of the approved transaction.
  2. At the end of the business day, or after another set time, the business owner submits a batch of payment records to their payment provider (eg. Bambora, TD, First Data).
  3. The payment provider will then submit the record of approved transactions to the Card Scheme (eg. Visa, MasterCard, AMEX).
  4. The Card Scheme will:
    1. Take these approved transactions and credit the payment provider. (Visa pays Bambora)
      • The payment provider will settle the amount to the business owner. (Bambora pays the business owner).
    2. Also issue a debit to the issuer (eg. RBC, Bank of America) to charge them for the transaction.
      • Finally, the issuer will post the transaction to the customer’s account.

And there you have it. The payment is approved, cleared and settled.

FYI: With Bambora, merchants typically will receive their settlement 3 business days after the purchase.

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