Getting funds to their destination.
WHAT SETTLEMENT IS
The actual movement of funds between institutions.
WHAT A PAYOUT IS
Funds transferred from a provider to a merchant's account.
WHAT DETERMINES TIMING
Provider terms The payment method Risk assessment of the merchant Banking hours and holidays
WHAT INSTANT SETTLEMENT PROVIDES
Cash flow.
WHAT IT COSTS
A higher rate, usually.
WHAT A ROLLING RESERVE IS
A proportion withheld for a period, released later.
WHY PROVIDERS IMPOSE IT
To cover chargebacks and refunds after the merchant has been paid.
WHEN IT IS IMPOSED
New merchants, high-risk categories, or elevated dispute rates.
WHAT TO MODEL
Cash flow including the reserve, not gross revenue.
WHAT PAYOUT RECORDS SHOULD CONTAIN
Which transactions are included Gross amount Fees deducted Refunds and chargebacks deducted Net amount
WHY THAT ITEMISATION MATTERS
Without it, reconciliation is guesswork.
WHAT TO CHECK
That every payout can be traced to its transactions.
WHAT TO ESCALATE PROMPTLY
A payout not arriving when expected.
