Settlement
Also known as: Card settlement
Settlement is the transfer of the net amounts that card scheme members owe one another after clearing. Issuers, acquirers and the scheme settle among themselves. It is not the transfer to the merchant, which is the payout.
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Example
On a given day, an acquirer's cleared payments produce a net amount due from issuers, after fees. The scheme settles that net figure between the institutions. The merchant sees none of it directly.
Settlement and payout are different things. Your dashboard may use one word for both.
Settlement is institution to institution. The Visa rules define it as the reporting and funds transfer of settlement amounts owed by one member to another, or to the scheme, as a result of clearing. Those amounts are daily net figures, and they include transaction amounts and fees.
So after a day of payments, the issuers, acquirers and the scheme square up. Interchange goes one way. Scheme fees go another. Payment amounts net out. Nobody ships cash for each card tap.
The step from the acquirer to the merchant's own bank account is the payout, and that entry explains the two steps. If you are a merchant, payout is what you see. Settlement is what happens above your head.
The word is used loosely. Many providers say "settlement" on a merchant's dashboard when they mean the payout to your own bank account. Ask which one they mean, and in which currency and calendar.
The two clocks also differ. The scheme's clock is the institutions' clock. The merchant's clock is whatever the contract says.
Settlement moves money between banks. Payout moves it to you.
