What it means
Name the obligation
Settlement has a defined context: participants in a payment system, a merchant and provider, or parties exchanging assets. Systems can distinguish provisional and final settlement. A generic “paid” status does not explain which obligation was discharged.
Separate the stages
A blockchain confirmation, a credit in a provider ledger, conversion into another asset and a bank payout can occur at different times. A merchant should understand which balance is available, who owes it funds and what finality or reversal rules apply to each stage. Reconciliation connects the evidence across these records.
Related concepts
Transaction finality, Payout, Payment reconciliation, Currency conversion.
In practice
A concrete example
A store records an accepted customer payment separately from the later bank payout of the provider balance owed to it.
Technical notes & boundaries
Settlement timing and finality depend on the system and agreement. Blockchain inclusion is not automatically equivalent to a completed fiat payout.
Go to the source.
Original references used for this definition. Product details and standards can change.
