What happens in the 2 seconds after you tap your card
Clearing and settlement: when a card payment really moves the money
Hours after you pay by card, the shop still has none of your money. Two more steps must happen first: clearing and settlement. When do they happen, and who does them?
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1
Your $8 is still on hold in your account. At closing time, Rono's terminal sends all the yeses of the evening to his bank in one bundle. Now they are claims for the money. A bundle like this is called a batch.
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2
Rono's bank passes the claims to the card network, with the claims of all its other shops. The network sorts them by bank and tells each bank what it owes. Bankers call that sorting clearing.
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