If you accept card payments at your business, you're probably wondering, "How does the money actually get from my customer's card to my bank account?"
Turns out, it's not as instant as it seems!
Even though a transaction looks like it's approved right away, there's a little behind-the-scenes process that makes it all happen. That process involves batches and settlements, and understanding them can really help you manage your business.
In this article
What's a batch in payment processing?
Think of a "batch" as a group of all the card transactions you've processed in a day. It's like a basket that holds all your sales for that day.
Why should I care?
While batches are still "open" (meaning the day hasn't ended yet), the transactions in it aren’t finalized yet. You can still cancel or “void” any transactions if you need to. This can save you time and money compared to giving a customer a refund!
| Read this learn article for the differences between refunds and voids. |
What’s a settlement in payment processing?
"Settlement" is when the money from all those transactions in your batch actually moves from your customer's bank to your business's bank account. Helcim takes the transactions from the batch and sends them to the banks to get you paid.
How do batches settle?
Most businesses have their batches "settle" automatically at the end of each day.
But some businesses like to do it manually, usually when they're closing up for the night. If this is you, then you can learn how to turn off auto-settlements here.
It's super important to settle your batches, one way or another, because if you don't, you might not get paid!
| Even with auto-settlement turned off, Helcim automatically settles your batches after 48 hours in case you forget to do it manually. |
Why do we need batches?
You know how when you buy something with your credit card, you might see it as "pending" for a day or two? That's because a credit card transaction is a two-step process.
First, the bank checks if you have enough money (that's the "approval").
Then, the money actually moves from your account to the business's account (that's the "settlement").
Businesses group transactions into batches to avoid paying a fee for every single transaction.
Settlements: a step-by-step process
Here's what happens when a batch settles:
All your transactions for the day are grouped into a batch.
That batch is sent to Helcim.
Helcim gets the money from the customer's banks and sends it to your business's bank account.
The customer's bank shows the transaction on their statement.
| When will I actually see the money in my account? Generally, funds should appear in your bank account within 1-2 business days for credit card transactions, after the batch is settled. However, it's important to note that several factors could affect this, such as initial batch reviews or transaction type. To learn more, visit our article on How long bank deposits take. |
Conclusions
Here’s a point-form review of what we learned in this article.
A batch is a group of your daily card transactions.
Settlement is when that batch of money is transferred to your bank account.
Understanding these processes helps you keep track of your money and avoid any surprises.
Next steps
Now that you have a solid understanding of batches and settlements, you can take control of how you manage your transactions and funds. Here are some helpful next steps:
Learn how to view your batches in Helcim: This will help you keep track of your daily sales and ensure everything is accurate.
Discover how to manage your auto-settlement settings: Setting up auto-settlement can save you time and streamline your end-of-day procedures.
Find out how to manually settle a batch: Knowing how to manually settle gives you flexibility and control over when you receive your funds.