Control Flow of Funds
Collect platform and third-party fees from your customers and route them to third-parties.
As a platform with a multi-party business model, you can charge a fee for your platform or any third parties involved. Your sub-merchants may or may not have multiple third-parties involved for their processes. The money movement differs based on the number of parties involved. Control of Funds enables the sub-merchant to seamlessly disburse money, per order, with reports, avoiding the hassle and confusion with settlements. The examples explain the money movement in the presence and absence of a third-party.
Assume the following:
- AcmeShop is a marketplace for clothes. - Razorpay Technology Partner
- Rani Wear is one of the many sellers on AcmeShop. - Sub-Merchant
- Deldel is a delivery service. - Third-party Service
- Gauri Kumari is a buyer.
Scenario:
- Gauri buys a scarf from AcmeShop. She pays a sum of ₹ 1200 for her order.
- The payment is processed and accepted by Rani Wear's Razorpay account and then the sum is divided and credited to the following:
- AcmeShop Fee = ₹ 50
- Delivery Fee for Deldel = ₹ 200
- Razorpay Charges = ₹ 20
- Rani Wear Bank Account = ₹ 930
Below image illustrates the money movement when a third-party is involved.
Assume the following:
- AcmeBook is an accounting platform that enables payment acceptance. - Razorpay Technology Partner
- Mulchand Kirana is one of the users on AcmeBook. - Sub-Merchant
- Gauri Kumari is a buyer.
Scenario:
- Gauri buys some kitchen groceries from Mulchand Kirana. She pays a sum of ₹ 1000 for her order.
- The payment is processed and accepted by Mulchand Kirana's Razorpay account and then the sum is divided and credited to the following:
- AcmeBook Fee = ₹ 50
- Razorpay Charges = ₹ 20
- Mulchand Kirana Bank Account = ₹ 930
Below image illustrates the money movement only with partner fee, when no third-party is involved.
Watch Out!
Razorpay deducts TDS for platform charges. Any GST implication for the sale of products/services has to be borne by the sellers and partners.
Below are some of the most common use cases for control of funds with embedded payments.
AcmeVidya is an e-learning platform that offers certifications and diplomas to students and working professionals. It hosts a range of courses provided by different institutions and instructors.
- AcmeVidya becomes Razorpay's Technology partner.
- The instructors and institutes are added as sub-merchants.
Assume a student pays ₹ 6000 for a diploma course provided by an instructor, Sarah Will. Sarah receives the amount on her Razorpay account. After transferring Razorpay's platform fee of ₹ 120 and any other third-party fee (maybe an exam center), of ₹ 1500, Razorpay settles the remaining amount of ₹ 4380 to Sarah's bank account.
AcmeTrips is a air-tickets and hotel booking platform. It lists the best offers along with other amenities provided by hotels and airlines.
- AcmeTrips becomes Razorpay's Technology partner.
- The airlines and hotel groups are added as sub-merchants.
- Other vendors, like outsourcing cab service - are third-parties.
Assume you pay ₹ 4000 for a room for one night in Mumbai's Presidency hotel. You have opted for the hotel's pick-up and drop services. The hotel receives the amount on their Razorpay account. After transferring Razorpay's platform fee of ₹ 80 and a charge of ₹ 1000 to an out-sourced cab company, Razorpay settles the remaining amount of ₹ 2920 to the hotel's bank account.
To support the money movement flow:
- Get the
platforms_marketplacestag enabled on your Partner account through your sales point of contact. - If you are charging a Platform fee, create a Linked Account for your merchant account and add your bank account details.
- Create a Linked Account for your third-party service providers, if any (for example, logistics partners). Add their bank account details.
After creating Linked Accounts, you can create payments on your sub-merchant accounts with your platform fees.
To collect platform and third-party fees:
You can also create
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