Net settlement refers to offsetting the movement of funds based on the total transactions of a time period, rather than addressing each transfer individually.
Typically, net settlement is combined with a definition of the settlement period. Conduit typically uses daily net settlement with clients, meaning that settlement occurs at the end of the day (3pm ET) based on the net funds movement during the day.
To sum up, transactions are submitted throughout the day and then settled at the end of the day by moving funds in one direction (the net balance between deposits and withdrawals).
If there are $1000 of deposits and $500 of withdrawals, we would make a single deposit transaction for $500 at the end of the day.
If there were $500 of deposits and $700 of withdrawals, we would make a single withdrawal transaction for $200 at the end of the day.
Updated 3 months ago