6. Settlement Amount
In last section, we covered ‘WHEN’ will merchant receive the money and in this section, let’s talk about ‘HOW MUCH’
After ‘reconciliation’, aggregator settles funds to merchants account (current or nodal or escrow)
Settlement amount depends on commercial model the merchant is configured and how much amount needs to adjusted for refund processing and chargeback recovery
Example: Transaction Amount: 100, PG Charge: 1%, GST:18%, Refund Amount to be adjusted: 50
- Upfront deduction model
Settlement Amount = Transaction amount (-) PG Charges (-) GST Amount (-) Refund adjustment (-) Chargeback Amount Recovered
Settlement Amount = 100 (-)1 (-) 0.18 (-) 50 = 48.82
2. Surcharge model
Settlement Amount = Transaction Amount (-) Refund adjustment (-) Chargeback Amount Recovered
Settlement Amount = 100 (-) 50 = 50
Note: PG charges + GST is borne by user so not part of settlement calculation
3. Invoicing Model
Settlement Amount = Transaction amount (-) Refund adjustment (-) Chargeback Amount Recovered
Settlement Amount = 100 (-) 50 = 50
Note: PG Charges + GST is invoiced to merchant so not part of settlement calculation
MIS Reports:
Aggregators shares settlement MIS reports that covers settlements, refunds adjusted for a particular day. The file format will vary for different aggregators and reports can be delivered through mail or dashboard.
In above example (1), assume the refund adjustment amount is Rs. 200, then what will happen?
<<read entry on refunds>>
