A Merchant’s Guide to Payment Gateway Settlements

With the increase in online buying and selling of products/services, payment gateways have emerged as a necessity for merchants to ensure customer satisfaction. They act as middlemen between customers and merchants and handle the payments involved in the transactions.

When a customer pays a certain amount to an online seller while placing an order, payment gateways are responsible to pass that amount to the seller. You might have heard merchants using different payment gateways saying that settlements take longer than usual.

But what are these settlements and what is the ideal settlement period you should expect? Let’s cover it all.

What is a payment gateway settlement?

Payment settlements refer to the final settlement of transaction amount in the merchant’s bank account –Â after deducting payment gateway charges. Payment gateways generally follow multiple models for merchant settlements, some of which take around three to seven days in settling the amount.

For a business, the longer it takes to receive payment gateway settlements, the higher will be the liquidity issues to maintain cash flows. This is the reason why most merchants consider the settlement period as an important factor while selecting a payment gateway.

Also Read: The Impact of Real-Time Settlements for Business

How does payment gateway settlement work?

Given below are the steps involved in settlements processed by a payment gateway:

The customer pays for an order using any of the available payment sources – credit cards, debit cards, net banking, etc.
The integrated payment gateway debits the customer’s bank account or wallet as per the order value
As a mediator, the payment gateway then connects with the merchant account and credit the amount in it (after deducting the charges involved)

Simplify payment settlements with Paytm Payment Gateway

If you want faster settlements to your bank account without any delay or hassle, look no further than Paytm Payment Gateway. It offers a 24×7 customer payment settlement solution to ensure that you never face a liquidity crunch.

Paytm offers multiple settlement options to merchants which can be picked as per their needs:

Batch settlements – in which multiple transaction amounts are collated and then settled in one go
Same-day settlements – where you can settle all the transactions in a virtual account, and then to your bank account multiple times a day without having to wait
Real-time settlements – in which you can receive payments in multiple settlement destinations of your choice right after the customers pay you online
On-demand settlements – where you can get instant fund transfers to your bank account as and when needed with a single click

Benefits of Paytm Settlements for Merchants
Timely settlements without long wait time (T+1 settlements in general; where T = date of capturing payment from the customer)
Easy to manage operation without facing capital crunch
Detailed reports in the merchant dashboard to check what comes in and when
Easy to check settlement status
Easy to keep track of payments with multiple reconciliation tools
Easy to split customer payments
Multiple settlement destinations to choose from – bank account, UPI VPA, Paytm Wallet, and Virtual Account Number

Stages of payment settlements

The following stages are involved in payment settlements taken care of Paytm:

The total balance to be transferred (after deducting refunds, commissions, and other deductions) is calculated
The balance amount is then transferred to the merchant’s bank account via IMPS, UPI, or NEFT
Merchant dashboard reflects the amount received along with information like reference number and transactional data

Note: A premium charge is levied with instant payment settlements. However, there is no extra charge for general payment settlement cycles (next-day settlements).

Steps to access Paytm payment settlement options

As a Paytm merchant, you need to have the Paytm for Business app installed on your device or access to the Paytm Merchant dashboard via a web browser
Log in to your merchant account and navigate to the Settlements option
You will see the remaining balance available for payment settlements
You can either wait for the regular settlement cycle or apply for Instant Payment Settlement
Once the transaction is completed, you can see the added amount in your bank account

Paytm Payment Settlements is useful for all Paytm merchants, be it an online startup, retailer, or business partner. You can use its features as per your business needs and enjoy hassle-free payment transfers whenever you need them the most.