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Authorisation, Clearing & Settlement Explained
Every card payment goes through three invisible but essential stages, authorisation, clearing, and settlement. Together, they ensure that money moves safely and accurately between all parties.
1. Authorisation: The instant decision.
When a customer pays, the transaction request travels from the merchant to the issuer via the acquirer and card scheme. The issuer checks if the account is valid, funds are available, and the transaction looks legitimate. Within seconds, it sends back an approval or decline. This is the “yes” that allows the purchase to go through.
2. Clearing: The reconciliation process.
After authorisation, the merchant’s acquirer and the issuer exchange detailed transaction records through the card scheme. This stage ensures that every amount, fee, and currency is accounted for correctly like balancing the books between parties on a global scale.
3. Settlement: The actual movement of money.
Finally, funds flow from the issuer to the acquirer, and then into the merchant’s account. Settlement can take anywhere from a few hours to a couple of days, depending on currencies, time zones, and networks.
With Monavate, these processes are fully integrated and transparent. Our platform connects issuing, processing, and settlement within one ecosystem, delivering real-time visibility, faster flows, and fewer moving parts.