Frequently Asked Questions –
Merchant Payment Settlements
What is a Settlement from a Merchant Account?
How often do merchants receive Payment for Online Credit Card Transactions Processed through their Merchant Account?
Funds are normally transferred weekly, unless otherwise stated at the time of account approval, from the bank or processor into the account of the bank that is designated by the merchant for settlement of funds. For most US merchant accounts and some international merchant accounts, that are setup through IBC Merchant Accounts, the merchant receives Daily Payouts to their Corporate Settlement Account. In determining payout days and dates, also consider the payout delay, commonly referred to as the Payout Arrears.
What is a Payout Arrears?
The delay of time for a payout between the designated processing period and the payout date, the processing period representing a period of time of processing determined specifically by the frequency of payout, which can be anywhere from one day to two weeks (as explained in the previous answer). The purpose of having a delay before payout to the merchant is to protect against perceived risks associated with that merchant, such as excessive refunds and chargebacks or sudden decreases in processing volume. As such, the length of Payout Arrears is determined from factoring risk during underwriting by the bank and/or processor.