What type of transaction involves clearing and settling without prior authorization?

A deferred clearing transaction is characterized by the fact that it allows for the clearing and settling of a payment without requiring prior authorization from the sender. This type of transaction often involves an agreement or understanding between the parties that enables the receiving party to process the transaction on a post-authorization basis.

The nature of deferred clearing transactions usually pertains to situations where the payment is authorized by some preceding action or agreement, but the actual clearing and settlement occur later. This approach can streamline operations and reduce friction in the payment process, especially in recurring payments or transactions where trust has been established between parties.

In contrast, authorized payment transactions explicitly require consent before the transaction is processed, ensuring that the sender has agreed to the transaction beforehand. Regular credit transactions typically involve direct authorization for immediate processing. Fraudulent transactions, by their very definition, lack any legitimate authorization, thus distinguishing them from deferred clearing transactions, which operate under pre-agreed terms.