Checking processor settlements against the bank

A settlement arrives as one credit. Behind it are hundreds of payments, each with its own fee. Here is how to check it properly.

Updated 21 October 2026

Three records of the same money

For a payments business the same money appears in three places: your own ledger or wallet system, the processor’s settlement report, and the bank statement. Each pair can disagree for a different reason, so each is worth checking on its own:

• Ledger to processor: payments you recorded that the processor never settled, or settled twice.
• Processor to bank: whether each settlement arrived in full.
• Ledger to bank: everything else, including transfers and refunds outside the processor.

The settlement check

For each settlement:

1. Take the processor’s settlement report and group the payments that make up that settlement.
2. Add up the gross amount of those payments.
3. Deduct the processor’s fees, the VAT on those fees (7.5%), and any refunds, chargebacks or other deductions shown.
4. The result should equal the credit that reached the bank, to the kobo.
5. If it doesn’t, the difference is a short settlement, a missing payment, a deduction you didn’t expect, or a timing difference (settled in one period, received in the next).

Check the fees too

A settlement can agree with the bank and still contain overcharges. Recompute the fee on each payment from the provider’s published local price list or your agreed rate, including any caps, and compare it with the fee charged. Small differences per payment add up over a month of trading; list them per settlement so they can be raised with the provider.

How often

Daily, or at least weekly, for busy accounts. Settlement problems are easiest to raise with a provider within days. Checked once a month, a short settlement from a busy weekend sits unnoticed inside a much larger pile. Peak periods such as Black Friday weekend and the run-up to Christmas deserve a daily check.

Where it goes wrong

• Matching the settlement total to the bank without looking at the payments inside it.
• Treating VAT on fees as part of the fee and losing track of it for VAT returns.
• Refunds and chargebacks deducted in a later settlement than the original payment.
• Several settlements paid in one bank credit, or one settlement split across two.

General guidance, not tax or legal advice. Rates and rules change; check current CBN and tax guidance or ask your adviser.