Transaction settlement is the process of moving funds from the cardholder’s account to the merchant’s account following a credit or debit card purchase.
The issuer will route funds to the acquirer via the card network. For debit card payments, the funds will be withdrawn directly from the cardholder’s bank account. For credit card payments, the issuer will forward funds to the acquirer and the cardholder will reimburse the issuer at a later date. When the acquirer receives the funds, the amount of the transaction — minus fees — will be deposited into the merchant’s account.