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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.

Payment settlement refers to the process of the issuing bank transferring funds from the cardholder's account, via a payment gateway, to the acquiring bank - the financial institution that accepts card payments on behalf of the merchant.

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.

Various facilities like Core Banking Solution, RTGS, NEFT, Online banking, Aadhaar based payment systems, UPI, BHIM, Prepaid Payments Instruments etc. are used for payment facilitation.

After a transaction has been approved, the payment settlement is the next and final step. Settlement is when the issuing bank transfers the funds from the customer's account to the payment processor, who then transfers the funds to the acquiring bank's account.

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. The business will then receive the authorized funds in its merchant account.