An agreed offsetting of obligations between two or more parties or participants in which a great number of obligations is reduced to a smaller number of obligations.
Basically this is the equivalent of two or more friends that sit on a table and net between themselves to sort the money transfer. The parties that owe money put the cash on the table , then the people that are owned money take money from the table. If you are owned money and owe money at the same time you just take or put the difference.
This is a series of posts with definitions for the jargon used in #banking, #fintech and #payments.
Too many people use some terms without understanding them beyond the definition.
Too many “experts” use the terms but they never had experience with the actual implementation of anything in #banking, #fintech and #payments.