Merchant settlement is the transfer of payment proceeds to the merchant after a customer transaction has been accepted and processed.
In stablecoin commerce, settlement can occur in the same stablecoin received from the customer, in another digital asset, or in fiat currency after conversion. A provider can settle individual transactions or aggregate them into batches. Timing can range from near-real-time to scheduled settlement periods. The merchant's settlement asset can therefore differ from the customer's payment asset.
Customer payment identifies how the buyer funds the transaction. Merchant settlement identifies the asset, amount, and timing of the proceeds delivered to the merchant.
Settlement terms determine the merchant's exposure to exchange rates, counterparty risk, liquidity delays, and reconciliation requirements.
A customer can pay in a dollar stablecoin while the payment provider converts the proceeds and sends a daily dollar bank transfer to the merchant.