Card Authorization, Clearing and Settlement
Learner explains card authorization, clearing, and settlement, including the roles of issuer, acquirer, network, and merchant, and traces a card transaction from swipe to settlement. Learner practises this skill on realistic banking cases, explaining the reasoning clearly and using correct terminology throughout the work.
Card authorisation, clearing and settlement: the full journey of a card payment from the till to the bank accounts.
What You Can Do After This Chapter
Learning objective. Learner explains card authorization, clearing, and settlement, including the roles of issuer, acquirer, network, and merchant, and traces a card transaction from swipe to settlement. Learner practises this skill on realistic banking cases, explaining the reasoning clearly and using correct terminology throughout the work.
Practical assessment. Learner traces a 120 dollar card purchase from authorization through clearing file submission to settlement, naming the message, amount, and party at each step. Learner then calculates the merchant settlement amount after a 1.8 percent interchange fee and a 0.30 dollar scheme fee, and explains what happens when authorization succeeds but clearing fails. Learner presents the work with calculations and assumptions stated clearly, then reviews it against the chapter checklist and corrects any gaps before submission.
Expected deliverables.
- Card transaction trace diagram
- Authorization, clearing, settlement stage table
- Merchant settlement calculation
- Clearing failure handling note
Completion criterion. Learner traces all three stages in order, calculates the merchant amount correctly, and explains the clearing failure consequence accurately. Judgement covers accuracy, completeness, and clear written explanation in the submitted work.