Settlement mechanisms are processes used to finalize transactions between parties, ensuring that the agreed-upon terms are fulfilled. These mechanisms can involve the transfer of money, assets, or securities, and are essential in various fields, including finance and trade. They help reduce risks and ensure that both parties meet their obligations. Common types of settlement mechanisms include clearinghouses, which act as intermediaries to facilitate transactions, and payment systems, which enable the transfer of funds. These systems are designed to enhance efficiency and security, making it easier for businesses and individuals to conduct transactions with confidence.