What activity occurs during the "settlement" step in the payment process?

During the settlement step in the payment process, the primary activity is that the merchant receives payment for the transaction. This phase involves the completion of the transaction where the funds are transferred from the customer's bank (also known as the issuing bank) to the merchant's bank (the acquiring bank). It ensures that the merchant successfully receives the money for the goods or services provided.

This step typically follows the approval of the transaction, where the transaction is first authorized (which is not the same as settlement). It also precedes any batch processing that might occur to reconcile risks and minimize settlements. The actual transfer of funds solidifies the merchant’s ability to access and utilize the money associated with the sales made. Understanding this aspect of the payment process is crucial for any business or individual involved in ecommerce, finance, or payment processing, as it dictates the flow of cash in business operations.