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Payment settlement involves collecting the funds for the amount recorded for an order. For example, when using credit cards, the settlement process specifically involves contacting the payment system and collecting the required amount of funds against the credit card.

What is a settlement period? The time lag between receiving a customer payment and receiving the funds in your merchant bank account is called the settlement period. Normally, this takes anywhere between 24 hours and several weeks, but three to five working days is typical for most payment processing services.

A settlement bank refers to a customer's bank where payments or transactions finally settle and clear for customer use. Often times, the payer of a transaction will be a customer of a different bank from the receiver, and so an interbank settlement process must occur.

Clearing involves network operators routing messages and other information among financial institutions to facilitate payments between payers and payees. Interbank settlement is the discharge of obligations that arise in connection with faster payments either in real-time or on a deferred schedule.

The POS settlement works in the same way as a bank reconciliation in the sense that it retrieves all transactions since the previous POS settlement. This means that the sales that are registered after the completed POS settlement, are automatically registered on the next settlement.

Once a transaction has been approved, settlement is the second and final step. This is when the issuing bank transfers the funds from the cardholder's account to the payment processor, who then transfers the money to the acquiring bank.

A settlement in payment gateway refers to the process by which the payment made by a customer for a product/service, is credited to the merchant account. What are the different types of settlements offered by Cashfree? The standard settlement cycle in Cashfree is T+2 days, where T is the date of the transaction.