Is Your Payment Gateway Promising T+2 Settlement? Here’s What They Don’t Tell You

T+1 settlements by Paytm payment gateway

When a business is described to be doing good, it usually indicates a steady cash flow. But if that business has to do even better, the money needs to go back into the trade.

For a huge number of merchants in India, the cash flow issue is real. Funds are often stuck, settlements don’t happen on time, and businesses are left to operate with limited capital. The sporadic availability of money has been one of the main reasons for companies shutting shop.

82% of failed businesses cite lack of cash flow as a contributing factor.

There are scores of low investment businesses, home-based ventures, vendor-heavy businesses, and so on, that are dependent on the timely availability of cash to keep the business up and running.

In fact, for any business, irrespective of its size or scale, earning revenue and investing back is a continuing process. This reinvestment of capital is responsible for powering the company’s overall growth, fueling its plans of expansions, driving its crucial decisions, and maintaining payment schedules.

Amid the Covid pandemic and lockdowns, as many as 1,107 companies closed their operations voluntarily in the financial year 2020-21 in the northern region. In 2019-20, 3,380 companies had wound up their operations. The cash was stuck and losses were huge.

Settlements issues in India

India has seen a significant surge in small and mid-size firms turning to the internet for an online presence and growth. Technological advancements have helped them streamline processes, create impressive customer experiences and ensure successful transactions.

Yet, when it comes to managing their cash flows, the lack of timely settlements is an unresolved issue. Even when the money is instantly received from customers through online transactions, most payment gateways take longer than they should to credit it into the merchant’s account.

Many of them declare T+2 (T being the day when a transaction is initiated) to be their standard settlement period but this claim is far from the truth as we shall see further in this article.

An untimely settlement means a delay in the working capital that needs to be restored on time. This may not sound to be a cause of concern for an established business but for most small and even medium-sized firms it has serious impacts.

How payment settlements work

Any settlement is complete when the payment done by the customer is credited in the merchant’s bank. There are several steps in between and a payment gateway plays an important role in determining the swiftness of a settlement.

Here’s a summary of how a payment gateway processes settlements

  • The buyer initiates an online payment through a credit/debit card, wallet, net banking, etc
  • The payment gateway communicates this information between the website, the acquiring and the issuing bank with the help of other entities like payment processors and card networks
  • Once the transaction is successful, the amount is credited in the merchant’s account after deducting the payment gateway charges

Now, most payment gateways assure a merchant of a settlement period of T+2 days. What they do not tell businesses is that this period is not achievable on a large number of days.

That’s because the 2 days counted are only working or business days. Add in a weekend just after or during the transaction and your settlement is delayed owing to the holiday.

If a bank holiday falls on any weekday, the payment gateways delay your settlement again.

What’s more, there are festivals and other occasions that extend the time-off and your funds can virtually get stuck for as much as 6 days before they reach you.

In fact, if you glance at the 2022 calendar and the official holidays for the year, you will get a fair idea of what your settlement period might look like.

T+2 settlement is likely to be breached for a staggering 47% days of the year – which means almost half of the year your money won’t reach you on time.

T+2 settlement is hence not only a deceptive assurance but also an unachievable one if your payment gateway is dependent on holidays for settlements.

Paytm Payment Gateway settlements: comparative analysis and insights

One of the primary offerings of Paytm Payment Gateway is its next day settlement promise which is T+1. With Paytm Payment Gateway, settlements are given utmost priority irrespective of holidays and weekends. Here’s a comparison:

Settlement Period*

Paytm Payment GatewayOther Payment Gateways

Average settlement time over the year


> T+2
Settlement times during multiple bank/public holidays



Number of times when settlement exceeds 4 days



Peak delay in settlement0


predictive data for 2022*

Paytm Payment Gateway’s T+1 settlement has been a game-changer for businesses. No matter the day or time of the transactions, your payments are credited on the next day and throughout the year.

It has empowered merchants with their financial decisions and with overdue payments not remaining an issue anymore, has ensured scalability and growth.

How Paytm Payment Gateway’s T+1 settlement helps small businesses

Speedy settlements are of utmost importance in today’s online market space where several small and mid-size businesses are trying to make a mark. Here’s why they are needed.

  • You engage with vendors and other partners and need instant liquidity
  • You need to make advance payments to procure the products
  • Your business model involves cash transfers in the form of awards, rewards, cashback, etc
  • Your inventory turnover demands a continuous restock and hence a steady flow of cash


Settlement period is an essential factor for the steady functioning and growth of a business. When you look for a payment gateway it is very important to thoroughly understand the settlement periods and dig deeper to evaluate their offerings

Paytm Payment Gateway along with fastest settlements also offers a range of benefits for merchants – an interactive dashboard with insights and data, high payment success rates, and best security for safe transactions among others.

As a result, apart from being the preferred choice of India’s top brands, Paytm Payment Gateway is being increasingly chosen by small and upcoming businesses that realise the importance of timely settlements.


Switch to Paytm Payment Gateway

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