The process by which members exchange financial data and value resulting from sales transactions, cash disbursements, or merchandise credits, which are ultimately billed to the cardholder’s account. A settlement consists of a batch or group of transactions, typically from a day or shift. For a merchant, a settlement means, please deposit this money in my bank account. These transactions are good. Most terminals and gateways can be set for auto settlement. Some merchants, such as those taking tips (like salons or restaurants), need to manually reconcile their tips and then manually settle their terminal to ensure accurate batches and the most advantageous cost associated with those transactions. Settling daily after close of business is ideal for two reasons. First, daily settlements ensure the lowest possible cost assessed by Visa/Mastercard and Discover. Secondly, daily settlement allows for the most consistent deposits into the merchant bank account.