Payments glossary
Settlement
Settlement is the process of actually moving money after card payments are approved: captured transactions are batched, cleared through the card schemes, and funds flow from the issuing bank to the acquirer and on to the merchant, typically one to two business days later.
From approved payment to money in the bank
Settlement is where a card payment stops being a promise and becomes money. Captured transactions are batched - typically once a day - and submitted through the acquirer into the card schemes' clearing systems. The schemes work out what each issuing bank owes each acquiring bank, funds move between the banks, and the acquirer credits the merchant. In South Africa the full journey commonly takes one to two business days from capture.
Gross versus net settlement
Under gross settlement the full transaction value arrives and fees are invoiced separately. Under net settlement - the more common arrangement - the merchant discount rate, refunds, chargebacks and any rolling reserve are deducted before the funds land. Net settlement is administratively lighter but makes good reporting essential: a merchant must be able to trace a single bank credit back to the individual transactions, fees and deductions inside it.
Settlement timing and cash flow
For a trading business, the gap between capture and cleared funds is working capital. Cut-off times matter - a payment captured after the day's batch closes joins tomorrow's file - and weekends and public holidays stretch the calendar further. Merchants comparing providers should ask for the settlement schedule in writing: the day count, the cut-off, and how refunds and chargebacks are recovered. LekkaPay provides itemised settlement reporting on its merchant account model so reconciliation is arithmetic, not archaeology.
Frequently asked questions
How long does settlement take in South Africa?
Card settlements commonly reach merchants one to two business days after capture, though the exact timing depends on the acquirer, the daily cut-off time, and weekends and public holidays. Alternative methods differ - an instant EFT payment confirms immediately but settles to the merchant on its own schedule.
Is settlement the same as a payout?
Not quite. Settlement is the interbank movement of funds through the card schemes from issuers to the acquirer. A payout is the transfer that puts money in the merchant's own bank account. In a direct merchant-account model the two effectively coincide; in facilitation models the provider receives settlement and pays merchants out separately.
Why doesn't my settlement match my sales total?
Settlement is usually net: fees, refunds, chargebacks and any rolling reserve are deducted before funds arrive. Itemised settlement reporting shows exactly what was deducted, so every cent of the bank credit can be traced back to individual transactions.
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