Skip to main content

Forced Settlement: How the Mechanism Works

Sofia avatar
Written by Sofia
Updated over 2 months ago

What is a Forced Settlement

Forced Settlement is a transaction in which the merchant independently initiates a charge from the card, bypassing the standard bank payment verification process.

How Forced Settlement Works

In a standard payment, the bank first checks the card balance and only then approves the charge. With forced settlement, however, the merchant can run the transaction through their own processing system, bypassing the usual authorization flow.

Important to Know

  • Such charges may result in the card going into a negative balance.

  • Forced settlements are initiated solely on the merchant’s side — Finup does not control these operations.

If you disagree with a charge or believe it was made in error, you need to contact the merchant directly to request a refund. Finup can provide transaction details on our side to help simplify your request.

Did this answer your question?