Payment Remittance refers to the funds a merchant receives from a sale. It can also refer to the process of sending a payment to a company or individual, typically electronically or through the mail.
In the context of card payments, the remittance is the amount transferred from the customer’s bank account to the merchant’s bank account after a sale. This process involves several intermediaries, including payment processors, acquiring banks, and card networks, each of which may charge fees for their services.
These fees are usually deducted before the funds reach the merchant’s account. Therefore, the amount remitted to the merchant may be less than the total transaction amount. It is essential for merchants to understand the fee structure of their payment processing services to accurately forecast their revenues and manage their cash flow.
The speed of remittance can vary based on the payment method used, the merchant’s agreement with the payment processor, and other factors. Some payment methods, like credit card payments, may involve a settlement period during which the funds are held by the payment processor before being remitted to the merchant’s account.