Settlement Process: Instant Commission Payout
The Biller Aggregation Service uses a commercial model where merchants pay a service fee. A cashback system is used to pay out commissions. Once a transaction is successful, the system instantly settles the commission. This is done by first debiting the full amount (gross debit) and then crediting the commission back, so the merchant quickly sees the final net cost of the service.
Calculation of Merchant Payable
The required funds for the transaction are defined by several terms:
- Vend Amount: This is the base amount of the transaction, representing the gross value of the service being purchased by the customer.
- Merchant Fee: A fee charged by the Aggregator to the Merchant, applicable only for certain products (otherwise set to zero).
- Merchant Payable Amount: This figure represents the total amount the Merchant must pay the Aggregation Service, equaling the Vend Amount plus the Merchant Fee.
The Settlement Flow
The process achieves an instant net settlement position through two specific account movements:
| Step | Action | Account Movement |
|---|---|---|
| 1 | Gross Debit | The Merchant's Account is debited for the full payable amount. This step signifies that the Merchant pays the full payable amount of the service. |
| 2 | Commission Credit | The Merchant's Account is immediately credited with the applicable Cashback/Commission. This represents the Merchant's profit, which is instantly paid out. The Cashback/Commission varies depending on the specific Billers and Products involved. |
The Final Net Settlement ensures that the Merchant's true cost is immediately calculated as the Merchant payable amount minus the Commission.
Example:
For a transaction where the payable amount is 1000 naira and the applicable Cashback is 20 naira:
- The Merchant is Debited 1000.
- The Merchant is simultaneously Credited 20.
- The resulting Net Cost to the Merchant is 980.
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