Clearing and Settlement

The Clearing and Settlement module manages the complete lifecycle of transaction clearing, from receiving network files to final settlement, including reconciliation and exception handling.

Incoming File Uploads

Supported Networks

Network	File Format	Frequency
Visa	TC (Transaction Clearing)	Multiple daily
Mastercard	IPM (Integrated Product Messages)	Multiple daily
Troy	National format	Daily
BKM	Interbank clearing	Daily

File Processing Workflow

1. File Receipt: Automated download from network SFTP
2. Validation: Format and integrity checks
3. Parsing: Field extraction and mapping
4. Matching: Authorization to clearing match
5. Posting: Transaction record update
6. Exception Queue: Unmatched items for review

Incoming Transaction Types

Type	Description
First Presentment	Original clearing record
Representment	Re-submitted after chargeback
Fee Collection	Network and interchange fees
Adjustment	Correction transactions
Reversal	Transaction cancellations

File Processing Features

• Automated scheduling
• Error detection and logging
• Duplicate detection
• Currency conversion
• Fee calculation

Outgoing File Creation

Outgoing File Types

File Type	Purpose
Issuer Clearing	Transactions for settlement
Acquirer Submission	Merchant transaction batches
Fee Files	Interchange and network fees
Chargeback Files	Dispute submissions
Representment Files	Chargeback responses

File Generation Process

1. Transaction Selection: Eligible transactions for clearing
2. Validation: Business rule checks
3. Formatting: Network-specific format conversion
4. Encryption: Security compliance
5. Submission: SFTP upload to network
6. Confirmation: Acknowledgment tracking

Operation Screens

Clearing Dashboard

• Daily file status overview
• Processing statistics
• Exception counts
• Settlement summaries

Transaction Search

• Multi-criteria search
• Authorization reference lookup
• Clearing reference lookup
• Date range filtering

Manual Operations

• Force posting
• Exception resolution
• Manual matching
• Transaction corrections

Reconciliation Screens

Authorization to Clearing Reconciliation

Match authorizations with clearing records: - Matched transactions - Unmatched authorizations (pending clearing) - Unmatched clearing (orphan records) - Amount mismatches - Currency mismatches

Clearing to Accounting Reconciliation

Verify clearing posts to accounting: - Posted transactions - Pending posts - Failed posts - Amount variances

Network Reconciliation

Balance with payment networks: - Settlement position - Fee reconciliation - Currency balances - Net settlement amounts

Reconciliation Reports

Report	Description
Daily Reconciliation	Daily matching summary
Exception Report	Unresolved items
Settlement Report	Net positions by currency
Fee Analysis	Interchange and network fees

Clearing End of Day

EOD Process Flow

1. Cut-off Time Reached
   ↓
2. Pending Transaction Review
   ↓
3. Exception Resolution
   ↓
4. Settlement Calculation
   ↓
5. File Generation
   ↓
6. Network Submission
   ↓
7. Accounting Posts
   ↓
8. Report Generation
   ↓
9. Day Close

Settlement Calculation

Component	Description
Gross Settlement	Total transaction value
Interchange Fees	Card scheme fees
Network Fees	Processing fees
Assessments	Scheme assessments
Net Settlement	Final settlement amount

Currency Handling

• Multi-currency settlement
• Exchange rate application
• Currency conversion fees
• Position management by currency

EOD Reports

Report	Purpose
Settlement Summary	Net positions by network
Transaction Detail	All cleared transactions
Exception Summary	Unresolved exceptions
Fee Summary	All fees and charges
Position Report	Currency positions

Settlement Confirmation

• Network acknowledgment tracking
• Settlement advice receipt
• Fund transfer confirmation
• Final reconciliation