Settlement Assets and Obligations

9 Months Ended

Sep. 30, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Settlement assets and obligations represent intermediary balances arising from the settlement process which involves the transferring of funds between card issuers, payment networks, merchants and consumers. The Company records settlement assets and obligations upon processing a payment transaction. Settlement assets represent amounts receivable from agents and from payment networks for submitted merchant transactions, and funds received by the Company in advance of paying to the merchant or payee. Settlement obligations represent the unpaid amounts that are due to merchants or payees for their payment transactions.

The principal components of the Company’s settlement assets and obligations were as follows:



(In millions)	September 30, 2020		December 31, 2019
Settlement assets
Cash and cash equivalents	$	1,386	$	1,656
Receivables	8,017		10,212
Total settlement assets	$	9,403	$	11,868
Settlement obligations
Payment instruments outstanding	$	391	$	345
Card settlements due to merchants	9,012		11,523
Total settlement obligations	$	9,403	$	11,868

The changes in settlement assets and obligations are presented on a net basis within operating activities in the consolidated statements of cash flows. However, because the changes in the settlement assets balance exactly offset changes in settlement obligations, the activity nets to zero.