Clearing

Clearing is the step that moves transaction details between the parties in a payment after a card has been authorized. Once a merchant captures an approved transaction, the transaction record is submitted into the network so the issuer and acquirer can reconcile what happened. Clearing organizes and matches this information so the correct amounts can be exchanged.

While authorization confirms that funds are available and approves the sale, clearing carries the finalized transaction data forward. It establishes the amounts and details that settlement then uses to move money between institutions.

Clearing is where the record of each sale becomes the basis for funding. Accurate clearing data drives accurate settlement, so errors or mismatches at this stage can lead to funding discrepancies that merchants must later chase down. Understanding clearing helps merchants interpret the reports that connect an authorized sale to the money that eventually arrives.

Clearing records also feed the downstream systems that merchants rely on for reconciliation and dispute handling. When transaction details are captured cleanly, it is easier to match sales to deposits, respond to questions about specific charges, and keep financial records aligned across authorization, clearing, and settlement.

In a standard flow, an authorized transaction is captured and submitted for clearing, where the network exchanges the transaction data between the acquirer and the issuer. This process confirms the finalized details of the transaction and prepares them for settlement, which handles the actual movement of funds.

For merchants, clearing usually appears indirectly through processor and acquirer reporting rather than as a separate action they take. Reviewing those records against internal sales data is the practical way to confirm that captured transactions cleared correctly and that the amounts flowing into settlement are accurate.