What is payment clearing?

Payment clearing is the process of verifying, exchanging, and reconciling payment transaction information between financial institutions and payment providers before funds are settled.

In a typical Shopify payment flow:

1. The customer submits a payment.
2. The payment is authorized by the bank or payment provider.
3. The transaction goes through clearing, where payment details are processed between the relevant institutions.
4. The funds are settled and paid out to the merchant according to the provider’s payout schedule.

Clearing happens before final settlement and helps ensure that the correct transaction amounts are transferred between the parties.