Net settlement
Settlement where the acquirer deducts fees, refunds and reserves before paying the merchant.
Net settlement is the model where the acquirer deducts fees, refunds and any reserves from the transaction value before settling the net amount into the merchant bank account. It contrasts with gross settlement, where the full amount lands first and fees and refunds are charged separately. Net settlement makes the bank-account view simpler but requires extra work to reconstruct the gross-revenue picture.
What it means for travel businesses.
Travel finance teams reporting net cash flow find net settlement convenient because the bank statement closely matches the operational picture. The trade-off is that gross revenue, refunds and chargebacks have to be reconstructed from settlement files to feed reporting.
Net settlement gives finance the clean bank-side picture but hides the gross revenue and the cost components inside the netted figure. For a travel business that wants to negotiate fees, optimise refund handling or watch chargeback ratios at brand level, those components have to be reconstructed from the settlement file — and the reconstruction is the unsung daily work in many finance teams.
The travel businesses that handle net settlement well unpack the file into per-booking gross, fees, refunds and chargebacks automatically, so the cost picture is honest without manual extraction. The businesses that do not unpack the file rely on the net number alone and miss the underlying trends.
How felloh handles it.
felloh reconstructs the gross picture from net settlement automatically — unpacking fees, refunds and chargebacks at the booking level — so finance gets both views without manual extraction.
The Settlement and Merchant Acquirer views in the dashboard unpack net-settlement files into per-booking gross, fees, refunds and chargebacks. The Cashflow view reconciles the resulting net arrival against the underlying bookings so finance sees both numbers without a parallel reporting layer.
For travel finance teams running on net-settled acquirers, the cost picture is no longer hidden inside the netted figure. Gross revenue, fee mix and chargeback impact are all visible at the level decisions get made.
Related terms.
Settlement
The movement of processed payment funds into the merchant account or bank account.Read termGlossary termGross settlement
Settlement where the full transaction value is paid out before fees are deducted separately.Read termGlossary termBatch settlement
Settlement of multiple transactions grouped together and paid out in one consolidated movement.Read termGlossary termAnticipated settlement date
The expected date a processed payment will arrive in the merchant bank account.Read termGlossary termMerchant Discount Rate (MDR)
The total fee a merchant pays per card transaction, expressed as a percentage of value.Read termSee how this works around your bookings.
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