Settlement Cycle

2017-01-08    7362   Glossary

For those transactions processed successfully through the payment gateway, merchants can check them at merchant dashboard easily, but they can not withdraw the funds to their bank account immediately due to settlement cycle rules.

A settlement cycle (T+1) refers to a calendar according to which all transactions done on X Day are settled on a X+2 basis. X = Transaction Date and +2 means 2 consecutive days after X.

For example, if a merchant’s settlement cycle is T+1, the settlement date will keep the below rules：

Transaction Date:                   Settlement Date:
2017-01-01                               2017-01-03  


2017-01-02                              2017-01-04  


2017-01-03                              2017-01-05  


2017-01-04                              2017-01-06


2017-01-05                              2017-01-07
     

       X                                        X+(1-1)+2
      …



If a merchant’s settlement cycle is T+10, the settlement date will keep the below rules：
Transaction Date:                   Settlement Date:
2017-01-01                              2017-01-12


2017-01-02                              2017-01-13


2017-01-03                              2017-01-14


2017-01-04                              2017-02-15


2017-01-05                              2017-02-16

      X                                         X+(10-1)+2
      …

Therefore, the settlement date can be formulated as : Transaction Date+Settlement Cycle-1+2(X+T-1+2)

Normally the settlement cycle ranges from 7 days to 30 days for different risk levels of verticals and merchant can only withdraw the amount with transactions passed the settlement cycle.