If You Need Split Funding Ability, Choose Your Payment Gateway Carefully

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in Blog
on Tuesday, 26 January 2016 12:03

Some payment gateways are finally catching onto the needs of today’s merchants by offering the ability to handle split funding. But not all payment processing software is onboard with this modern need for split payments yet. Revenue sharing is more important than ever in some industries, and it makes sense to choose a payment service provider that can make this easy and seamless for your company.

Traditionally, payment processing was a bit simpler. There was a need to divide payment among parties, but it involved only three entities: the MSP, the ISO and the reseller. Now, more sophisticated revenue sharing in necessary in many industries. What about yours?

You will obviously need to be able to split payments for paying merchant services commissions, but there may also be several other parties or needs involved in the transaction. Keep reading to learn more.

Three Split Funding Scenarios That May Impact You

Convenience fees add complexity to a payment transaction, especially if the fee must then be split among several entities. Consider, for example, a renter who pays $800 in rent by credit card and is required to pay a 3 percent convenience fee totaling $24. The payment software must allow for this. But in addition, that convenience fee may be divided, with some of the funds going to a web payment portal. Not all payment processing software can handle this.

An inferior payment gateway may fail when it’s necessary to keep taxes and reserves in separate bank accounts. Perhaps a tax of 8 percent must be added to most transactions and a 3 percent convenience fee is also required. Plus, there are legal or financial reasons why the tax and a specific reserve amount of perhaps 10 percent must be stored in different bank accounts. The payment management system must be able to handle these complexities automatically -- without human intervention -- for maximum efficiency.

In some cases, retailers may need to share revenue with a vendor. Perhaps an online retailer charges a fixed amount above the wholesale price. But the margin is 10 percent for products from some suppliers while it is 5 percent or 8 percent from other suppliers. There may be a need for managed payments that provide each vendor with its share of each transaction. But customers may have ordered products in a single order that involve multiple vendors, confusing the situation if the payment gateway isn’t carefully programmed.

Make The Smartest Choice Possible

PayPal has been ahead of the curve in adaptive payments, leading some companies to choose PayPal services out of perceived necessity. But this prominent payment collector doesn’t have the only system that can manage complex divided payments.

At PayVisors, our goal is always to help you find the products and services that make business work better for you. As a business consulting company with deep and wide experience in payment processing, we can help you choose the right payment processing software. In many cases, that’s the UniPay gateway from United Thinkers. Contact us now to learn more about how split funding and adaptive payments don’t have to be a thorn in your side.

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