Commission Computation Module

Business connected with payment acceptance requires computation and payment of commissions and fees in one or other way. In a basic system configuration eKassir® – Terminal Network automation of this process may not be required. However if there are lots of agents and/or payees in the system, a module that enables automation of commission computation becomes really vital. Otherwise, you’ll have to employ “an army” of accountants performing the required calculations during long hours. Time and labor needed for this activity will slow down the business development and “eat” a substantial part of profit.

Commission calculation may be divided into two main components:

• Computation of commissions paid to agents;
• Computation of fees paid by payees to payment system for payment acceptance in their favor.

Computation of commissions to other system intermediaries and additional system roles can be made possible. All such calculations performed in eKassir® System are made by Commission Computation Module which is an integral part of payment acceptance server and is managed through Automated Operator’s Workstation.

Computation of Fees Paid by Service Providers (Payees)

Typically such fees are calculated simply as percentage of the payment amount, i.e. percent of turnover. If all commissions were computed in this way then the task of commission computation would be quite easy. But in some cases commissions are computed based on more complicated rules. For example, MTS pays commission depending on the type of payment accepted in its favor. If the payment has been accepted through self-service kiosk with some additional commission then MTS will pay a certain percentage as a commission fee, if no additional commission has been charged then another percentage will be employed, if payment has been conducted through ATM Machine then a third value percentage will be applied. So, with MTS a commission for payment acceptance will have to be computed based on the type of payment. Another example is BeeLine where payment acceptance commission depends on the sum of payment – for different amounts of payment different percentages are applied for commission computation.

A commission charged from payer should be noted separately. In this case service providers do not pay any fee to payment system but allow payment system to charge a payer a certain commission on top of the payment amount for payment transfer. Practically any system of electronic money may serve as an example of such scheme.

Besides, there are different ways of commission settlement with different service providers. In some cases service provider transfers commission fee to payment system account after an act of reconciliation for a reported time period (month) is signed. In other cases payment system transfers the amount of payments made in favor of service provider less commission.

Some service providers may apply nonstandard rounding, which should also be taken into account.

So, the task of commission computation turns out to be far from being easy, as it may seem from the first glance.

Computation of Commission Paid by Payment System to its Agents (Dealers)

When a contract between payment system and its agent is being worked out the commission rates for the agents to receive (charge payers) for every payment accepted through the system are fixed in a special document under the contract. Also, there are options when percentage of the commission depends on the total turnover of the agent within the system during the reported time period (usually during a month time) or turnover for a certain service. Once the contract between payment system and agent is signed the agent (dealer) is assigned with a certain tariff plan. The agent can see its tariff plan in dealer’s cabinet in Commission Management section.

Dealer Commission Tariff Plans

A notion of remuneration (commission) tariff plan has been introduced in the payment system to simplify commission accrual for system agents (dealers). Tariff plan is comprised of remuneration rates for each type of service that agents accept payments for. There may be any number of dealer commission tariff plans in the payment system both typical ones, e.g. depending on its turnover and specially designed for a certain dealer (agent) based on standard tariff plans available in the system.

Operator through Automated Operator’s Workstation assigns tariff plan to a dealer after agent contract is signed. Any changes of the tariff plan are allowed only for current and successive accounting time periods. Tariff plans for previous accounting periods are also stored in the system. You cannot change them since final commission settlements have already been conducted based on them.

Sub-dealer Remuneration Computation

Sub-dealers differ from payment system dealers by the fact that they don’t have direct contract with payment system for payment acceptance. They work either under agent contract with payment system dealer or in fact represent a dealer’s division, which the dealer would like to highlight in its contract for convenience of settlements. A dealer assigns commission tariff plan to its sub-dealer on the basis of its own tariff plan in Dealer’s Cabinet (section “Commission Management” – “Set up Dealer’s Commission”. A dealer can assign to its sub-dealer a percentage of its own commission rate both for all services and for each separate service. Having assigned to sub-dealer 100% commission fee for all services the dealer won’t earn anything on sub-dealers’ payment acceptance. If 50% commission is assigned to sub-dealer than dealer’s commission fee for sub-dealers’ payment acceptance will be shared 50/50 between the dealer and its sub-dealer.

Once the commission tariff plan for sub-dealer is formed and fixed in Dealer’s Cabinet, sub-dealer can see its commission rates having access to the Cabinet under its own account.

Commission Settlement with Dealers and Sub-Dealers

Calculation of commission fee is initiated by the payment system once the accounting time period (a month) is over. Calculations are made based on all payments accepted by all payment system intermediaries regardless of whether there is an agent contract between them and the payment system or not. An act of reconciliation is formed for each payment system participant and is automatically posted into Dealer’s Cabinet for review and downloads by all the system participants. Next, participants have the opportunity to check the calculations and agree with them or argue. Settlements across participants occur after approval of acts of reconciliation. The payment system transfers commission fees to dealers. Dealers respectively pay to their sub-dealers.

All the above options and specifics of commission computation and settlement are envisaged in eKassir® Commission Computation Module.