# Settlements

Settlement refers to the process when funds are transferred from the TPP’s settlement account to the TPP’s corporate account, or sub-TPP’s corporate account. This can take place on a periodic basis.

To initiate settlement you will need to use the payouts API. In this case the Token.io settlement account is the debtor. The beneficiary or payee could be a sub-TPP or another TPP-owned corporate account.

For more information on the payouts capability refer to [Payouts](./payouts).

### Settlement status

The following table describes the possible statuses that can be returned in the `status` field during a settlement.

| status | Description |
|  --- | --- |
| `SETTLEMENT_IN_PROGRESS` | This status is provided when a Token.io settlement account is used as the beneficiary for the payment, and replaces the payment initiation status. |
| `SETTLEMENT_COMPLETED` | This status is provided when a Token.io settlement account is used as the beneficiary for the payment, and replaces the payment initiation status. |
| `SETTLEMENT_INCOMPLETE` | This status is provided when a Token.io settlement account is used as the beneficiary for the payment, and replaces the payment initiation status. Reconciliation has failed. This happens when Token.io doesn't find the corresponding transaction in the TPP's settlement account automatically. |


#### Settlement status for SEPA and SEPA Instant payments

During settlement of a settlement accounts payment, the status update job will run first for up to 30 days. Payment will then enter into a 'final' status, normally `INITIATION_COMPLETED` (v2) or `SUCCESS` (v1).

Once the status update job has run, the reconciliation job looks for matching inbound payments.

For **SEPA** payments:

- if a matching inbound payment is found within 15 days of the final payment status update -> `SETTLEMENT_COMPLETED`
- if no matching inbound payment is found within 15 days of the final payment status update -> `SETTLEMENT_INCOMPLETE`


For **SEPA Instant** payments:

- if a matching inbound payment is found within 1 day of the final payment status update -> `SETTLEMENT_COMPLETED`
- if no matching inbound payment is found within 1 day of the final payment status update -> `SETTLEMENT_INCOMPLETE`


#### v1 settlement status

For v1 payments, the `INITIATED`, `SUCCESS` and `FAILURE_EXPIRED` statuses can transition to `SETTLEMENT_IN_PROGRESS` when using Settlement accounts. From `SETTLEMENT_IN_PROGRESS`, the status can transition to either `SETTLEMENT_COMPLETED` or `SETTLEMENT_INCOMPLETE`.

#### v2 settlement status

For v2 payments, the `NO_FINAL_STATUS_AVAILABLE` and `INITIATION_COMPLETED` statuses can transition to `SETTLEMENT_IN_PROGRESS` when using settlement accounts. From `SETTLEMENT_IN_PROGRESS`, the status can transition to either `SETTLEMENT_COMPLETED` or `SETTLEMENT_INCOMPLETE`.

If you have any feedback about the developer documentation, please contact [devdocs@token.io](mailto:devdocs@token.io)