Settlement and Reconciliation in Europe

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Settlement

• Authorization – The process of approving a cardholder’s transaction to the merchant via the network, based on if a card is valid, business rules are met, and funds are sufficient. If necessary, a temporary hold can be placed on funds.
• Clearing – The process of finalizing the hold on funds and posting the transaction on the cardholder’s account. This process is triggered by the merchant’s capture request.
• Settlement – The process of transferring the funds between the merchant’s and the cardholder’s banks.

• Prior to settlement, authorization and clearing are non-monetary exchanges of transaction information.
• Clearing provides the amount to be debited from issuers and credited to acquirers.
• Merchants keep authorizations in a batch until they are processed for clearing.
  • Most merchants perform batch processing once a day. High volume merchants may have multiple batches.

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Settlement reports

• Encrypted with your public key.
• Delivered daily to your SFTP server.
  • Marqeta’s system will periodically check for new files from the network and, once received, will process and forward them within 30 minutes.
  • For settlement cycle timing, consult your network.
  • Reports are typically received by 3:00 pm UTC daily.

• For Visa – VSS Reports TC46 (Machine Readable) / TC47 (Human Readable).
  • There are various reports inside each format. Reach out to your Visa representative to find out which reports are available for you.
• For Mastercard – T112 (Clearing Data) / T140 (Aggregate Amounts).

• SFTP host name, or IP and port number.
• SFTP file directory structure.
• GPG public key and ID (required for encryption).
• SFTP username.
• BIN (Visa) or ICA (Mastercard).

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Clearing webhooks

• Debit
  • authorization.clearing
  • authorization.clearing.atm.withdrawal
  • authorization.clearing.cashback
  • authorization.clearing.quasi.cash
  • authorization.clearing.representment
• Credit
  • refund
    • Includes sales reversals and any other credit type not listed below.
  • refund.authorization.clearing
  • original.credit.authorization.clearing

• type – Determines whether the transaction is a debit or a credit.
• batch_number – Details which batch the file came in and can provide accurate date/time of when the batch was sent from the network.
  • Should be used to determine cut-off times.
• settlement_date – Determines all clearings associated with the date of settlement you are reconciling.
• created_time – Determines the time Marqeta created the clearing webhook.
  • Use batch_number for network accurate settlement times.
• fees – Determines if any fees are associated with the transaction.
  • Can be used to calculate interchange, if required.
• network_reference_id – References the transaction identifier from the network.
  • Visa – Remove 0002 prefix.

{
  "transactions": [
    {
      "type": "authorization.clearing",
      "state": "COMPLETION",
      "token": "token",
      "user_token": "token",
      "acting_user_token": "token",
      "card_token": "token",
      "preceding_related_transaction_token": "token",
      "created_time": "2020-11-30T13:07:36Z",
      "amount": 14.90,
      "currency_code": "CHF",
      "network": "VISA",
      "subnetwork": "VISANET",
      "fees": [
        {
          "type": "INTERCHANGE_FEE",
          "amount": 0.238400,
          "credit_debit": "C"
        }
      ],
      "network_reference_id": "0002460335033670463",
      "batch_number": "2020113011464516"
    }
  ]
}

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Visa settlement reconciliation

• VSS-110 – Daily Summary Report.
• VSS-110-M – Monthly Summary Report.

• Second Sunday in March to first Sunday in November – 10:00 GMT.
• First Sunday in November to second Sunday in March – 11:00 GMT.
  • You should confirm these with your Visa representative.

• Clearing received before cut-off is reported under VISANET SETTLEMENT SERVICE.
• Clearing received after cut-off is reported under INTERNATIONAL SETTLEMENT SERVICE.

• Processing Marqeta clearing webhooks.
• Summing transaction amount (credits - debits).
• Counting transaction types.
• Using batch_number to group by batch.
  • The first 10 digits of the batch number for batch date/time, for example, 2020113011 464516.
• Comparing Visa’s settlement report to Marqeta’s summary of count and amount.
  • Additional fees may be charged by Visa, and they should appear on the report if you need to deduct them.

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Mastercard settlement reconciliation

• T112 – Transactional Clearing Data
• T140 – Aggregate Settlement Report

• There are six cycles in a day.
  • Speak with your Mastercard representative to find out which cycle(s) apply to you.

• Processing Marqeta clearing webhooks.
• Summing transaction amount (credits – debits).
• Counting transaction types.
• Using batch_number to group by cycle.
  • The final digit of the batch number can be used to determine the clearing cycle number, for example, 2020113011 46451 6
• Comparing Mastercard’s settlement report to Marqeta’s summary of amount.
  • Additional fees may be charged by Mastercard, and they should appear on the report if you need to deduct them.

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Settlement and reconciliation responsibilities