---
term: "Settlement"
category: "Settlement and reconciliation"
url: https://federatedbanking.com/glossary/settlement
source: Federated Banking™ glossary
---

# Settlement

> Coordinating what participants owe each other so that final positions are agreed and paid.

Settlement is the process of working out and completing the obligations between participants in a network. Instead of every payment settling one by one, participants' positions are brought together, netted where possible and settled in agreed runs. The result is fewer movements, clearer positions and a status each participant can follow.

Related terms: [Netting](https://federatedbanking.com/glossary/netting.md), [Reconciliation](https://federatedbanking.com/glossary/reconciliation.md)