Simple definition
The step where payment details are checked and adjusted before the final payment.
Expanded definition
The process of matching, verifying, and reconciling payment instructions between the parties involved before settlement.


When paying with cards, the path from purchase to funds delivery involves intermediary steps between consumers and businesses. Learning this clearing process helps track transactions end-to-end. Let's explore the full life cycle that transforms sales from authorized promises into settled payments.

Defining Clearing

Clearing encompasses the steps between transaction authorization and settlement into merchant accounts. It covers:

  • Issuer verification that sufficient funds or credit exist for purchases.
  • Acquirer confirmation that merchant and buyer details check out.
  • Card network processing of transaction data between acquirers and issuers.
  • Movement of money from issuers to acquirers to fulfill payments.

Clearing facilitates the actual delivery of funds, concluding transactions.

Stages of Clearing

Common steps in the clearing process include:

  1. Card terminal or app sends authorization request to acquirer.
  2. Acquirer routes transaction data to card network.
  3. Network forwards authorization request to issuer.
  4. Issuer approves transaction amount to be cleared.
  5. Issuer sends approved funds to card network.
  6. Network channels money to acquirer for deposit into merchant account.

Understanding Clearing Flows

Insights into clearing workflows help merchants track payments and troubleshoot hiccups. While clearing operates behind the scenes, it critically enables the realization of successful commerce.

The Bottom Line

Clearing is the lifeblood carrying authorized transactions from approval to funds disbursal. Mastery of these in-between steps creates transparency for merchants within the highly complex payments landscape.