Charge Configurations

This section describes how to define and profile the charges and fee structure for the different GovNet processors and Providers for the different currencies to be processed.

Description of Terminology

Here are some short notes about terminologies related to charge configuration in a gateway system:-

Processor Charge

The processor charge is defined by a fee which is typically a percentage of the transaction amount or a fixed amount per transaction. This fee is incurred by the customers in an attempt to deposit or withdraw funds into their wallet accounts.

Transaction Charge

For any transaction to be processed through the GovNet gateway, this is possible with the help of third-party providers who levy a fee for processing a given transaction, however also for the gateway not to operate at a loss, we levy a fee on top of what the processors charge us and that fee is incurred by the merchant is called transaction charge, that is charged for processing any transaction of any currency.

Transaction/Gateway Profit

It's the difference between the revenue generated from a specific transaction (such as a collection or payout) and the costs or expenses (such as processor charge) associated with that transaction.

Settlement Days

This refers to a period over which the collected merchant funds are held by the provider for a number of days and after which those funds are released. Example: So in a state where settlement time is, let's say two days, and then the providers take up a percentage and hold for say a month, it means also as a gateway we will do the same thing, we release a certain sum to the merchant after, let's say the two days. Then afterwards we release the other extra value that we took off after a month.

Rolling Reserve Rate

Rolling reserve rate refers to a percentage for which a small amount from the merchant's funds for every transaction is held in reserve by the payment processor as a form of security against potential chargebacks, refunds, and other financial liabilities.

For instance, if the rolling reserve set by the payment processor is 10% and GovNet's merchant collects $1,000 in credit card sales in a day, $100 (10% of $1,000) will be held in the reserve by the processor who processed those transactions.

Rolling Reserve Days

Rolling Reserve Days refer to the specific number of days for which a portion of GovNet's merchant funds from daily transactions is held in reserve by a payment processor or acquiring bank.

Example: If a merchant does a transaction on a Card through, let's say Cyber Source and Cyber Source tells GovNet that they're going to hold a portion of funds for let’s say 10 days from what was supposed to come to GovNet. It means even the merchant who is trying to collect and GovNet processes their transaction through Cyber Source, GovNet should make their transaction behave exactly like what the third party is doing.

So if Cyber Source holds a portion of funds for 10 days, GovNet will also hold the same portion for 10 days of what was meant to go to the merchant because, in actual sense within those 10 days, GovNet doesn't have their money.

As time passes, older reserves are released while new reserves are added to the account, creating a rolling effect.