What is Gross settlement?

Payout model where the acquirer funds the full transaction amount and invoices fees separately; preferred by larger merchants for reconciliation clarity.

Gross settlement is a payout model where an acquiring bank remits the full, unadjusted value of approved card transactions to a merchant's nominated bank account.

This transfer occurs irrespective of any associated processing fees, refunds, or chargebacks, which are instead invoiced and collected separately, typically on a monthly basis.

The acquirer initiates a separate funds transfer for the full gross amount, often on a daily or near-daily basis, ensuring the merchant receives the precise value of sales processed without deductions.

For merchants, gross settlement simplifies daily reconciliation as the funds received directly correspond to the gross sales value recorded at the point of sale, aligning financial inflows with sales ledger entries.

This method contrasts sharply with net settlement, where the acquirer deducts all fees, refunds, and chargebacks from the gross transaction value before remitting a single, net figure.

A common operational consideration for merchants utilising gross settlement is ensuring adequate cash flow management to cover the separately billed fees, as these can accumulate significantly before their due date, particularly for high-volume processors.