Settlement vs Clearing in Practice
How clearing and settlement differ in real payment operations, with practical control points.
In practical operations, clearing is the message and obligation process, while settlement is final value transfer.
Why this distinction matters:
- A transaction can clear but fail to settle
- Cut-off and holiday calendars can impact settlement timing
- Reconciliation and liquidity planning depend on settlement, not only clearing status
Operational checklist:
- Identify the payment rail and its settlement model.
- Confirm local cut-off times and holiday impact.
- Define same-day fallback actions for failed settlement.
- Track exceptions with root-cause categories.
A treasury team that monitors settlement behavior closely will improve liquidity accuracy and reduce end-of-day surprises.