Settlement – Payments 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. Settlement can be as fast as next day or as long as a week.

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. 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. Beanstream, TD, First Data).

The payment provider will then submit the record of approved transactions to the Card Scheme (eg. Visa, MasterCard, AMEX).

The Card Scheme will take these approved transactions and credit the payment provider, who will settle the amount to the business owner. (eg. Visa will pay Beanstream, who will pay the business owner).

The Card Scheme will 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. If you are looking for more information on Settlements with Beanstream please check out our support documentation.

Beanstream is Your Partner In Payments.
Nicole Stright

Nicole Stright

Nicole is our coffee dependent content specialist. With a quick-witted way with words, she could make you enjoy reading an instruction manual. She was born American, raised Canadian and has lived briefly in Poland. A quintessential west coastian she can be found running the seawall, practicing savasana in yoga or enjoying an over-hopped I.P.A. Nicole is responsible for all of the bean puns as well as creating compelling copy driven by analytics that converts. She strives to simplify the complicated and wants readers to easily understand the often convoluted industry of payments.
Nicole Stright