Batch Closing (settlement)

"Batch Closing" refers to the process of finalizing and submitting a group of transactions (a batch) to the payment processor for settlement. It usually happens at the end of a business day or shift, after all transactions have been processed. During batch closing, the transactions in the batch are reviewed and confirmed, and the payment processor is instructed to transfer the funds from the customers' accounts to the merchant's account.

Key points about Batch Closing:

Finalizing Transactions: It finalizes all the transactions (payments, refunds, voids, etc.) that occurred since the last batch was closed.

Trigger for Settlement: Once the batch is closed, the payment processor begins the settlement process, transferring funds from customer accounts to the merchant’s account.

Daily Process: For most businesses, batch closing happens daily at the end of business hours. Some systems can do this automatically, while others require manual batch closing.

Prevention of Errors: Batch closing ensures that all transactions are properly recorded and minimizes the risk of discrepancies or missing payments.

In summary, batch closing is the process of finalizing a group of transactions and sending them to the payment processor for settlement, ensuring that the merchant receives the appropriate funds from customers.