What is a batch in card processing?
Short answer
A batch is a group of captured card transactions that a merchant, terminal or PSP sends to the acquirer at once, usually at a daily cut-off. Closing the batch submits the transactions for clearing and starts settlement. A batch that is not closed in time delays funding, which is why reconciliation tracks each batch from capture to bank credit.
In detail
A batch is a set of captured transactions grouped for submission to the acquirer. In stores, the terminal closes its batch at the end of the day. Online, the PSP builds batches automatically at fixed cut-off times.
What happens when a batch closes
- The captured transactions are sent to the acquirer.
- The acquirer submits them to the card schemes for clearing.
- Issuers settle the amounts to the acquirer, minus interchange.
- The acquirer or PayFac funds the merchant, usually one or more business days later.
Why it matters
- Funding speed: a missed cut-off delays payment by a day.
- Expiry risk: transactions left in an open batch may be captured after their authorization has expired.
- Reconciliation: settlement reports often refer to batch numbers, so operators match batches to bank credits.
A clean batch process, with alerts on unclosed batches, avoids most of these problems. Read Authorization vs Capture and how matching simplifies POS reconciliation.