What is the settlement period for domestic card transactions?

The settlement period for domestic card transactions is typically one day after the transaction date. This timeframe is established to facilitate the processing and clearing of transactions efficiently.

In most cases, when a consumer makes a purchase using a card, the transaction is authorized immediately, but the actual funds transfer and settlement require a period during which the transactions are batched and processed by the payment networks and financial institutions involved. This one-day settlement allows for a timely reconciliation of accounts for merchants and ensures that both consumers and merchants can track their finances effectively.

Other options suggest a shorter or longer settlement timeframe which would not align with the standard practices for domestic card transactions in many regions. Understanding this standard is crucial for those working in the payments industry, as it impacts cash flow management and operational procedures for businesses.