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UniPayGateway

October 19, 2016
Written by
James Davis
Written by James Davis
Senior Technical Writer at United Thinkers

Author of the Paylosophy blog, a veteran writer, and a stock analyst with extensive knowledge and experience in the financial services industry that allows me to cover the latest payment industry news, developments, and insights.

My works have been cited across media and payment blogs. I do my best to help businesses make the most efficient financial decisions that can positively and significantly improve their business growth.

Whether you are a seasoned investor or just starting out in the world of payments, my writing is designed to be accessible to everyone and help people navigate the complex world of payments. So if you want to stay up-to-date on the latest trends and insights in the payment industry, be sure to check out Paylosophy and my published works.

Reviewed by
Kathrine Pensatori
Product Specialist at United Thinkers

Product specialist with more than 10 years of experience in the Payment Processing Industry. I help payment facilitators and PSPs solve their various payment processing issues. On a regular basis, I work with a team of knowledgeable technical people in the space, and I am passionate about finding creative solutions to the challenges presented by the Payments Industry.

I would be happy to help with any questions you might have regarding credit card payment processing, merchant services, EMV certifications, the various ways of becoming a payment facilitator or a payment platform, as well as any other Payment Industry related issues you might be struggling with. Feel free to follow me on Quora, and don’t hesitate to send me links to the specific Quora questions you would like me to answer.

Challenges of implementing Split Funding models

With the advance of online marketplace models the demand for split funding functionality increases. However, many payment service providers (PSP) are reluctant to offer split payment processing functionality to their customers on top of already provided merchant services. Payment service providers are discouraged by the risks and challenges, associated with traditional split funding platforms.

Challenges of a traditional split funding model

When a chargeback is issued or refund requested by a customer, the challenges of a traditional split funding mechanism become obvious. The primary merchant or affiliates can be unable to pay their shares of the amount (due to lack of funds or other reasons). In this situation the heaviest burden may fall upon the PSP (while the outstanding debts will be recorded as future payables by the merchant and affiliates). That is why the model can be called a PSP-centric one.

Challenges of a merchant-centric split funding model

In a merchant-centric split funding model, when a payment comes in, the merchant has to return all outstanding debts to the PSP. And when a chargeback is issued by a customer, the whole amount should be covered by a merchant, while the share, owed by affiliates, should be recorded as future payables. In this way, the split payment model becomes much more transparent and attractive for payment service providers.

Read more about split funding challenges in the respective article on Paylosophy.

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