Settlement
  • Updated on 17 Jun 2020
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Settlement

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The Settlement Manager performs the settlement, i.e. funds have been transferred out of the settlement manager's operational bank account to the Settlement Payee’s account. The Settlement Manager provides information to the Settlement Payee that is used to automate reconciliation of the payment.

1. Settlement of commission when method of payment is “Credit Card”.

Customer has purchased a service and has paid for it with credit card. The sale has a commission that is paid to the Seller using the Billing and Settlement Plan.

a) Preconditions

Carrier (ORA) has successfully executed the payment for the Order with the credit card details provided by the Seller in the PaymentProcessingSummary of the request to create the Order.

b) SwO Process

  • When confirming the order to the Seller ORA creates new PaymentProcessingSummary with new PaymentID with payment method Cash for the payment of the commission.
  • ORA sends ClearanceRQ message to the Settlement Manager including in it the Clearance for the payment of commission to the Seller.
  • After successful sanity check and validation, the Settlement Manager acknowledges the receipt of the ClearanceRQ message with ClearanceRS message. The ClearanceRS message includes the Clearance for the payment of the commission with Remittance Date “RD” and the Settlement Date “SD” as per SwO Schedule, and the Clearance Status Code “Accepted”.
  • Settlement Manager sends ClearanceNotif message to the Seller. The ClearanceNotif message includes the Remittance Date “RD” and the Settlement Date “SD” as per SwO Schedule, and the Clearance Status Code “Accepted”. In this ClearanceNotif message the seller is the Payee and ORA is the Payer.
  • Following the SwO Schedule on Remittance Transfer Notification Delivery Deadline Date the Settlement Manager sends the RemittanceTransferNotif message to the Remitance Payer, who in this case is the Carrier (ORA). The RemittanceTransferNotif message is identified with its RemitID and includes the Total Amount that must be remitted by the Remittance Payer (ORA).
  • On Remittance Date the Remittance Payer or ORA orders payment to the Settlement Manager’s bank account for funds equivalent to the Total Amount in the RemittanceTransferNotif message identified with its RemitID. The Remit ID is included in the remarks of the bank transfer order.
  • On Settlement Date “SD” the Settlement Manger sends SettlementTransferNotif message, that is identified with its SettleID. The SettlementTransferNotif message includes the Total Amount being settled to the Seller (or Settlement Payee) and the list of Clearances that have been aggregated for this SettlementTransferNotif. The Settlement Manager also orders bank transfer to the Seller’s bank account for the Total Amount in the SettlementTransferNotif message and includes in the remarks the Settle ID.

Note: It is possible that the Seller does not receive SettlementTransferNotif message because the Clearance for commission is included with all Clearances related to this Seller and in the end the Seller is still Remittance Payer. However, this clearance has been subtracted from the overall amount that the Seller has to remit. In this case there will be no RemittanceTransferNotif message sent to the Carrier (ORA).

2. Settlement for a refund.

Seller has sold multiple services. Purchase has been paid and settled in full at time of order confirmation and Seller has received 10% commission, which has been cleared as well. Customer decides to cancel one of the services and according to order rules is entitled to CHF75 refund. Customer requests refund in cash to the Seller and the Seller then to ORA.

a) Preconditions

Remittance and settlement are in the same currency. Initial purchase has been paid and cleared in full. The market where the Carrier and Seller operate and concluded this transaction allows for refund of commission.

b) SwO Process

  • ORA and Seller have completed the re-shopping for the voluntary servicing request and:
    o The initial Order Item has been cancelled and new Order Item has been created with new value.
    o Additional new Order Item (“Refund Item”) for the refund has been created.
  • ORA sends ClearanceRQ message to the Settlement Manager where ORA has included the Clearance related to the “Refund”. The Net Clearance Amount in the Payment Information of the Order has negative amount because the ORA payables are higher than the ORA receivables. Therefore, the Payer, in the refund related Clearance that is part of the ClearanceRQ message, is ORA and the Payee is the Seller. The amount to be remitted by ORA is the Net Settlement Amount of CHF67.5 (CHF75 for the refund related to the cancelled item net of the CHF7.5 for the commission paid to the seller at the time of sale [CHF7.5-CHF75=-CHF67.5]).
  • After successful sanity check and validation, the Settlement Manager acknowledges the receipt of the ClearanceRQ message with ClearanceRS message. The ClearanceRS message includes the Remittance Date “RD” and the Settlement Date “SD” as per SwO Schedule, and the Clearance Status Code “Accepted”.
  • Settlement Manager sends ClearanceNotif message to the Seller. The ClearanceNotif message includes the Remittance Date “RD” and the Settlement Date “SD” as per SwO Schedule, and the Clearance Status Code “Accepted”. The Seller here is the Payee and the Carrier is the Payer.
  • Following the SwO Schedule on Remittance Transfer Notification Delivery Deadline Date the Settlement Manager sends the RemittanceTransferNotif message to the Remittance Payer. The RemittanceTransferNotif message is identified with its RemitID and includes the Total Amount that must be remitted by the Remittance Payer (or the Carrier) and the list of Clearances that have been aggregated for this Remittance Transfer Notification.
  • On Remittance Date the Remittance Payer orders payment to the Settlement Manager’s bank account for funds equivalent to the Total Amount in the RemittanceTransferNotif message identified with its RemitID. The RemitID is included in the remarks of the bank transfer order.
  • On Settlement Date “SD” the Settlement Manger sends SettlementTransferNotif message that is identified with its SettleID. The SettlementTransferNotif message includes the Total Amount being settled to the Seller (or Settlement Payee) and the list of Clearances that have been aggregated for this SettlementTransferNotif. The Settlement Manager also orders bank transfer to the Seller’s bank account for the Total Amount in the SettlementTransferNotif message and includes in the remarks the Settle ID.