What does batch settlement refer to?

Batch settlement refers to the process of consolidating multiple transactions into a single batch that is then forwarded to a back-end processor for settlement. This ensures that transactions, which could occur over a specified period, are processed together in a more efficient manner, allowing for streamlined operations and reduced processing costs.

When transactions are batched, they are usually held until a predetermined time where they are settled, rather than being processed individually in real-time. This can help merchants manage their transaction processing more effectively and can also benefit back-end systems by reducing the number of requests they handle at any given moment.

The other choices represent different aspects of the payment processing landscape. Immediate payment consolidation relates more to real-time payment processing rather than batch processing. An authorization request sent in real-time focuses on the verification of funds availability before a transaction is completed and does not pertain to batch processing. A temporary hold on funds for transaction validation deals with ensuring funds are available at the moment of the transaction rather than dealing with the batch processing of transactions after the fact.