Gross settlement definition
/What is Gross Settlement?
Gross settlement is the transfer of funds that will be immediately available to the recipient. This is an electronic transfer between banks, and typically involves separate payment instructions for each transaction. The cost of gross settlement transactions is high, so individual transactions tend to involve larger amounts of funds or be very time sensitive.
Gross Settlement vs. Net Settlement
Gross settlement involves the immediate transfer of funds for individual transactions, while net settlement involves the batching of a number of transactions, where the net amount is transferred at the end of the day. Gross settlements result in faster payments, but are also more expensive to process.
Terms Similar to Gross Settlement
Gross settlement is also known as a real time gross settlement.