Clearing and Settlement
The clearing process typically occurs at the end of the day, once all card transactions have been recorded and authorized through the 'Online to Issuer' process. The Card Scheme collects all transactions approved by the Issuer (more specifically, by the Affiliate under the BIN Sponsorship model) and generates a set of clearing files containing all transaction details. These details include, for example, the specific card used for the payment, the associated customer and account, the execution date, and information regarding the merchant where the transaction took place.
This process involves generating multiple files that contain not only the expenses charged to the card, but also any related fees (if debited to the cardholder), transaction reversals (funds returned to the customer), various reconciliation files, and interchange fee reports.
The primary purpose of these files is to report to the affiliate the total volume spent by end customers (the cardholders) and to debit the amounts—previously verified and authorized during the O2I (Online to Issuer) process—from the underlying accounts linked to the cards themselves.
Despite the fact that many files are received by the Schema, the most important ones are the following:
- Clearing Multischeme: holds transactions and expenses related to single cards
- Fee Multischeme: contains fees received by the Schema that are not always related with a single card
Every file has a structure that is specific for that type. But they are alway composed by two main parts:
- Header: contains main informations about the clearing date and number of record contained in the file. It is usually used to check if the content was corrupted during transfer.
- Rows: is the list of transactions (or fees); each record has many attributes that allow to the affiliate to understand better the expense and debt (or credit) the appropriate card holder.