What is Settlement?

Settlement is a simple process by which any business can collect payments via a payment gateway. The settlement process is completed when the payment made by a customer reaches your bank account.

Payment Gateway Settlement Cycle

Here’s how the money movement happens.
There are three main stakeholders in a payment gateway settlement cycle:

1. Issuing bank is the customer’s bank
2. Payment gateway
3. Acquiring bank is your bank

Once a customer pays you, the money is deducted from their account instantly. Money moves from your customer’s bank to your bank via the payment gateway. This money movement takes T + 2 days. After deducting payment gateway charges, the remaining amount is then transferred to your account after T+3 days. This is what a generic payment gateway settlement cycle looks like:

In the case of card payments, the card networks connect the issuing bank & acquiring bank to enable online payment. The entire payment gateway settlement cycle remains the same.  

This table will help you understand how much time each payment mode needs to settle: 

As you can see, the money movement is not immediate and depends on bank processes. So now you know why you don’t receive your online collections instantly. 

Can We Fast-Track These Settlements?

Yes, there’s a way fast-track these settlements!

With PayU Priority Settlements, you can get your customer payments any time of the day in just 15 minutes. It works 24×7, supports all payment modes, and lets you choose your settlement cycle.

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