What does "settlement" mean in the context of Verifone transactions?

In the context of Verifone transactions, "settlement" specifically refers to the process of finalizing and transferring funds from the customer's account to the merchant's account after a transaction has been completed. This step is crucial in the payment processing cycle, as it ensures that the funds are accurately moved, reflecting the completed sale. Settlement typically occurs after authorization, where a transaction is verified but not yet completed financially. During the settlement process, the merchant's transaction batches are compiled and sent to the payment processor or acquiring bank, which then facilitates the transfer of funds and updates the respective accounts.

This term emphasizes the importance of the financial reconciliation between the parties involved—merchant, customer, and financial institutions—thus highlighting the operational backbone of electronic transactions in a payment processing system.