Commerce Glossary
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What is a Transaction Settlement?
trans - ac - tion set - tle - ment
noun
The process through which a merchant receives funds for a transaction with a customer.
How Does a Transaction Settlement Work?
Once a buyer purchases goods or services, his or her issuing bank sends funds to the seller's payment processor, which disperses said funds to the merchant. The term 'settlement' is also used to refer to the specific amount of funds transferred by an acquirer to a merchant for the acceptance of a card transaction.
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