About settlement

Settlement is the process carried out by a Settlement Agent, represented by CIPCIP - It means "Interbank Payment Chamber". It operates the Fund Transfer System (SITRAF – “Sistema de Transferências de Fundos”), which uses continuous compensation for inter-bank obligations. It is responsible for settling card payment cycles., with the goal of determining the net debit or credit position of each party to a transaction.

Through the liquidation process, issuers and acquirer fulfill their obligations arising from the liquidation process and transfer funds. The settlement follows some terms, as shown in the table below:

Transaction type

Deadline for settlement

National purchase (credit)

D + 27

International purchase (credit), withdrawal (credit), purchase/withdrawal (debit)

D + 1

These processes are shown in the following flow:

FIG: Interbank settlement process flow - stage oneFIG: Interbank settlement process flow - stage one

FIG: Interbank settlement process flow - stage one

1 – A person makes a transaction by using the card;

2 – The merchant registers the transaction and requests authorization;

3 – The acquirer registers the transaction and requests authorization;

4 – The card brand registers the transaction and requests authorization;

5 – The issuer authorizes the transaction and debits it from the customer’s balance;

6 – The card brand responds on the authorization and registers the amount to be transferred by the issuer to the acquirer;

7 – The acquirer responds on the authorization and registers the amount to be transferred by the acquirer to the merchant;

8 – The transaction is completed.

After the transaction is completed, we have another flow in order to complete compensation and settlement processes:

FIG: Interbank settlement process flow - stage twoFIG: Interbank settlement process flow - stage two

FIG: Interbank settlement process flow - stage two

1 – The acquirer sends the credit and the debit result to the merchant;

2 – In parallel, the card brand sends the issuer’s debit and credit result to the acquirer

3 – CIPCIP - It means "Interbank Payment Chamber". It operates the Fund Transfer System (SITRAF – “Sistema de Transferências de Fundos”), which uses continuous compensation for inter-bank obligations. It is responsible for settling card payment cycles. receives information and executes interbank settlement;

4 – The merchant's host institution receives a response regarding the settlement and credits them;

5 – The merchant receives the credit.

For correct settlement by issuers, they need to go through a Clearing process for the transactions with the card brand.


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