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Finance & Banking vocabulary · Payments & Cards

Settlement

Meaning in finance & banking, with examples

/ˈsetlmənt/nounAdvanced term

In finance & banking, settlement means: The final step of a payment or trade, when money or securities actually move from one party to the other and the deal is complete.

In Turkish: takas, mutabakat, ödemenin kesinleşmesi

How it is used

Used in payments, cards and securities. Clearing comes first and works out who owes what; settlement then moves the funds. In securities, T+2 means settlement two business days after the trade date. Outside finance, a settlement is also an agreement that ends a dispute.

Example sentences

  1. Card transactions are sent to the scheme for clearing and settlement at the end of the day.

  2. Settlement of the bond trade will take place on Thursday.

Common collocations

  • clearing and settlement
  • settlement date
  • T+2 settlement
  • settlement risk
  • net settlement
  • transactionA single movement of money, such as a payment, transfer, deposit or withdrawal, recorded on an account or card.
  • securitiesFinancial assets that can be bought and sold, such as shares, bonds and bills, which give the owner rights like part ownership or a claim to repayment.
  • authorizationThe card issuer's approval of a card transaction at the moment it is made, after checking the card, the available limit and signs of fraud.
  • merchantA business that accepts card or digital payments from customers for goods or services, such as a shop, restaurant or online store.
  • wire transferAn electronic transfer of money from one bank account to another, often between different banks or countries.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Payments & Cards

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This page explains English vocabulary for learners. It is not financial advice.