# 7.5. Construction principles of billing model

## Overview

## Rates definition

## Commission accounting

There is a probability that the commission would not match the expected one.

*Example 1:*

The Dealer’s rate plan is denied as follows: if the transaction amount is between 0 and 1000 USD, the Dealer’s rate is 5 USD, if greater than 1000 USD – 8 USD;

The Manager’s rate is fixed: 10 USD;

*Example 2:*

Dealer’s rate: for all the transactions 5 USD, except for BIN 233445 which has the rate of 12 USD;

Manager’s rate: let’s assume that the Manager’s didn’t take into account the Dealer’s rate for the BIN and defined the fix rate of 10 USD.

## The hold and its carryover

The total earnings of any participant is: commission + hold of the participant – hold of preceding participant.

For the Bank: in the moment t1 for the period ΔtB the earnings will be topped up by the amount of the hold HB, in the moment t2 will be deducted the same amount;

For the Dealer: in the moment t1 for the period ΔtD the earnings will be topped up by the amount of the hold HD, in the moment t3 will be deducted the same amount, in the moment t2 the Dealer’s earnings are topped up by the amount of the carryover CB paid back by the Bank

For the Manager: in the moment t1 for the period ΔtM the earnings will be topped up by the amount of the hold HM, in the moment t4 will be deducted the same amount, in the moment t3 the Manager’s earnings are topped up by the amount of the carryover CD paid back by the Dealer

For the Reseller: in the moment t1 for the period ΔtR the earnings will be topped up by the amount of the hold HR, in the moment t5 will be deducted the same amount, in the moment t4 the Reseller’s earnings are topped up by the amount of the carryover CM paid back by the Manager

For the Merchant: the Merchant cannot define the hold values, in the moment t1 for the period ΔtR the earnings will be deducted the amount of the hold HR, in the moment t5 will be topped up by the same amount

## Rates validation

## Event model

### Standard transaction types

Transaction |
Description |
---|---|

sale |
withdraws the amount from the client’s account |

preauth |
holds the amount on the client’s account but doesn’t withdraw |

capture |
captures the amount from the client’s account, can be only issued after the respective preauth |

cancel |
cancels the preauth transaction, if it has not been captured by capture operation |

reversal |
returns the amount back to the client’s account |

chargeback |
the request to charge back the amount initiated by the cardholders via the issuing bank |

dispute |
to contest the chargeback operation, confirms the double withdrawal |

fraud |
the operation marks the transaction as fraudulent |

refund |
the operation to debit the client’s account directly |

transfer |
the money transfer operation, transfer the money between the cards or from the Merchant’s account |

### Standard transaction statuses

Transaction |
Description |
---|---|

approved |
the transaction is approved by the Bank or PSP |

decline |
the transaction is declined by the Bank or PSP |

filtered |
the transaction is filtered out by the system before it reached the Bank or PSP |

APPROVED: all transaction types ;

DECLINED: sale, preauth, transfer;

FILTERED: sale, preauth, transfer, reversal;

Minimum (min)

Percentage (rate)

Fixed(absolute) rate (abs)

Hold percentage (hold)

Hold period

User defined function

the maximum of the defined minimum and percentage multiplied by the transaction amount is first calculated: greatest(min, amount*rate)

to the calculated value the fixed rate is added: greatest(min, amount*rate) + abs

the hold is being withdrawn: greatest(min, amount*rate) + abs + hold

the User defined function gets applied. The function can redefine the calculation

the transaction amount is deducted by the calculated amount

Minimum (min)

Percentage (rate)

Fixed(absolute) rate (abs)

User defined function

## Rates table configuration

The calculation of the aggregated amounts(total amount, total number and ratio) is accomplished by default at the Gate level. In order to insure the rates transparency you should select the calculation of the aggregated amounts at the Endpoint or Project level.

It might happen the the card will fall into several directions at the same time. In this case the direction is selected in the following priority: the transfer within a bank, then the direction where both sender and receiver are defined (e.g. Visa2Visa), then the direction where only the sender is defined (e.g. Visa2Any), the direction where only the receiver is defined(e.g. Any2Visa), default direction.