How do third party commissions work?

December 17, 2024

Discover how the Third Party Commissions modality works to divide the commissions when making a payment with a credit card

The Third Party Commissions modality allows the division and dispersal of a transaction in two different accounts with a single charge by using a predefined percentage, a fixed amount or a combination of both.

In this modality there are two types of merchants: the main merchant, who is in charge of the sale of a product or service, and the receiving merchant of commissions, who receives the fees for the performed transactions.

When a merchant requires to divide the total of the sales commission due to regulation or for convenience, it could apply the Third Party Commissions. When Third Party Commissions are implemented, the main merchant receives the money from the transaction deducting the commission amount, which will be sent to the Receiving Merchant account, without charging the main merchant’s account for the commission. This process is different to the one implemented in the Gateway model, where the money from the transactions passes directly to the merchants and then Kushki charges the merchant for the commission of the transaction made.

The final customer pays for a product or service in a single transaction and Kushki takes care of dividing and disperse the transaction in 2 separate accounts under predefined conditions. In the cardholder’s (customer’s) purchase detail, two charge details are shown with their corresponding items.

The total amount of the transaction can be divided by percentage (from 0% to 100%), a fixed amount ( e.g. 2 USD) or a combination of both (10% + 1 USD per transaction).

Considerations

• Third Party Commissions are currently available only with credit cards in Ecuador.

• Once the Third Party Commissions service is activated, all merchant transactions will be divided according to the predefined conditions. There is no option to select which transactions will go through this flow and which others will go through the normal card charge flow.

• To enable or disable the Third Party Commissions modality, it is required to send a request to our support center.

• The commission breakdown is shown in the following products: