Clearing & Settlement
Reconciliation and final transfer of funds among banks post-transactions.
Detailed Description
Clearing & Settlement
What is the difference between clearing and settlement?
Clearing is the preliminary stage where transaction details are exchanged and verified, while settlement is the final stage where the actual transfer of funds occurs.
Who are the key participants in the clearing and settlement process?
Key participants include the cardholder, merchant, acquirer, issuer, payment processor, and card networks.
What are the types of clearing and settlement methods?
Types include Real-Time Gross Settlement (RTGS), Batch Settlement, Deferred Settlement, and Net Settlement.
What risks are associated with clearing and settlement?
Risks include fraud risk, operational risk, credit risk, and liquidity risk.
How have technological innovations impacted clearing and settlement?
Technological advancements like blockchain have introduced more secure, efficient methods for processing transactions, reducing time and costs.