Paytm Settlements: Why Wait for Days When You Can Get Payments Settled Daily?


For any business, liquidity is paramount for functioning effectively. Having a steady cash flow ensures that a business can meet working capital expenses, from paying bills to placing inventory orders. An efficient and instant settlement process ensures that the business functions smoothly. 

What is ‘Settlement’?

For businesses, Settlements is the process through which the money paid by a customer for a product or service reflects in their bank account. While transactions are processed in real-time, the settlement process usually takes a little longer. Till the time the funds arrive in the business account, the settlement process cannot be considered complete.

Although payment gateways often look like a simple pay-and-go process, the workings are a little more complicated. 

  • Money moves through several channels, including the two transacting parties’ bank accounts and the payment gateway, which serves as an intermediary. 
  • After accounting for fees, charges, and taxes, reconciling the transactions at all ends is another complexity to maneuver. 
  • Then, there is the question of refunds and chargebacks. Initiating these payments without checking whether the business received them in the first place is another thing that payment gateways need to be wary of. 

Yet, despite these complexities, payment gateways like Paytm provide the fastest settlement process, have easy reconciliations for businesses, and help with tracking business growth. 

How does Paytm’s settlement process work?

At Paytm, we understand how crucial settlement is to business. This is why Paytm’s settlement products offer diverse customization options for merchant partners so that they can choose one that fits their requirements. Before going into the options available, let us explain to you how our settlement process works:

Step 1: At a particular point in time, when the merchant wants to settle transactions, our PG system computes the total payout amount after adjusting for commissions, chargebacks, or refunds. 

Step 2: Then, our PG system will identify the right partner for each transaction and initiate the payment request. Depending on the transfer rail, that is whether the transactions are based on IMPS payments, UPI, NEFT, or other methods, the payout amount is processed to deposit in the registered bank account of the merchant. 

Step 3: After the transfer, the reference number and the transaction data are shared as MIS reports to the merchant. Paytm also provides merchants with a dashboard where they can track these settlements and download reports.

Now that you understand the PG process for Paytm, it’s time to explore the options we provide. For our merchant partners, we at Paytm provide three different settlement frequency options:

  • Batch settlement

Under this option, all transaction amounts for a merchant are collated in batches of specific periods and then settled in one go. Batches can be 

  • a “T+n” batch, wherein all payments made on day the “T” are processed within “n” calendar days. For instance, for a “T+15” day cycle, all payments made on the 1st of a month are settled by the 16th of that month.  
  • A custom settlement cycle wherein the merchant can define their batch of 24 hours, such as getting settlements for all payments received during a specific period, like between 9 AM and 12 AM, for instance.


  • Same-day settlement

For businesses that need money fast, Paytm also provides same-day settlements that reflect in the merchant bank account on the same day. The merchant can either transfer the day’s collections to their account with a single click on their Paytm Business dashboard or select automated frequencies for settlements to take place directly during the day. 

  • Real-Time settlements 

In case a business has an even more immediate need for money, our real-time settlement option can process payments simultaneously as they occur. Banks can settle the funds directly to the merchant account for each payment right after completion. Although net banking was the requirement for this, Paytm is extending this feature for other payment sources as well. 

Available transfer rails and settlement destinations

Paytm employs different transfer rails to complete the settlement process. A transfer rail is a network used to move funds from one source to another. Depending on a set of rules, we offer five different money transfer rails with a dynamic routing protocol:

  • Unified Payments Interface (UPI)
  • Immediate Payment Service (IMPS)
  • National Electronic Funds Transfer (NEFT)
  • Real-Time Gross Settlement (RTGS)
  • Wallet transfer

Paytm also offers all merchant partners four different settlement routes. While bank accounts are the most preferred destination, we also offer merchants the option to choose three other settlement destinations: using a Virtual Account Number (VAN), a UPI VPA, or directly to your Paytm wallet. 

Key features of Paytm’s settlement product

  • Settlements as a lending tool: Paytm provides merchants with a same-day settlement option on demand, which works like an upfront loan. Even as our PG system reconciles and processes payments, we transfer the money to the merchant without making them wait for funds to come through from the bank, card system, or other trails. This helps merchants tide over any liquidity issue they may face. 
  • Settlements on holidays and weekends: Paytm provides settlement on all 7 days of the week, including public and bank holidays, for a small additional charge. This feature helps merchants meet immediate cash requirements without any delay. 
  • Settlement reconciliation: Paytm provides several ways to enable easy financial reconciliations for all payments. Merchants can integrate our API to get details like transfer reference number, a custom date range for transactions, and detailed settlement reports. Our dashboard view allows merchants to customize their data and download reports, which are also shared on email or SFTP. 
  • Split Settlements: For merchants who offer split settlements, that is accepting payment from multiple sources for a single order, Paytm reconciles this into a single payment. 
  • Multiple settlement destinations: Apart from accepting split payments, Paytm also offers merchants to transfer the amount to multiple settlement destinations. This means that you can transfer a part of the collections to your bank account and another part to your Paytm wallet. 

Why choose Paytm as your payment partner?

Paytm’s settlement options support both large and small businesses for easy payments. The flexibility we provide via same-day settlement, real-time settlements, processing on all days of the week, and the convenient settlement reconciliation dashboard makes the whole collections process easy. We are also working on a strategy for support recovery of EDC rental, quick loan repayment for merchants from their settlement as well as multiple settlement destinations with amount limits on each destination.


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