Settlement Models

Use this guide to see how the Disbursement & Fee Report (DFR) behaves under Gross Settlement and Net Settlement, using concrete examples to show how the same transactions produce different fee columns and bank deposits.

Prerequisites: Field Reference

Before reconciling, you need to understand which settlement model your account uses. This determines when and how fees are collected.

To learn more about when D+1 vs D+2 reports are available for each settlement model, see Getting Started.

Gross Settlement

The short version: You receive the full transaction amount daily. Fees accumulate and are debited from your bank at month-end.

┌─────────────────────────────────────────────────────────────┐
│  GROSS SETTLEMENT FLOW                                      │
├─────────────────────────────────────────────────────────────┤
│                                                             │
│  Daily:                                                     │
│    Sale $100 ──► Bank deposit: $100                         │
│                  Fee tracked: $2.90 (not deducted)          │
│                                                             │
│  Month-end:                                                 │
│    All tracked fees ──► Bank withdrawal: $XX.XX             │
│                                                             │
└─────────────────────────────────────────────────────────────┘

How It Works

1. Transactions settle throughout the day

2. Gross Settlement Amount = full transaction value (e.g., $500.00)

3. Total Gross Fees = fees tracked but NOT deducted (e.g., -$14.50)

4. Total Net Fees = always $0.00 in Gross Settlement

5. Net Disbursed = equals Gross Settlement (you get it all)

6. At month-end: A Transfer | Fee Debit record initiates bank withdrawal for all accumulated fees

Sample Data: Transfer TRF_001 (Gross Settlement)

What this means:

• Your bank deposit today: $890.49

• Fees tracked (will be debited at month-end): $25.82

Month-End Fee Debit

At month-end, all tracked fees are collected via a single bank withdrawal:

The Transfer | Fee Debit record initiates the bank withdrawal (-$2,450.00).

Net Settlement

The short version: Fees are deducted from each transaction immediately. Your daily deposit is already net of fees.

┌─────────────────────────────────────────────────────────────┐
│  NET SETTLEMENT FLOW                                        │
├─────────────────────────────────────────────────────────────┤
│                                                             │
│  Daily:                                                     │
│    Sale $100 ──► Fee deducted: $2.90                        │
│               ──► Bank deposit: $97.10                      │
│                                                             │
│  Month-end:                                                 │
│    Nothing (fees already collected daily)                   │
│                                                             │
└─────────────────────────────────────────────────────────────┘

How It Works

1. Transactions settle throughout the day

2. Gross Settlement Amount = full transaction value (e.g., $500.00)

3. Total Gross Fees = always $0.00 in Net Settlement

4. Total Net Fees = fees deducted immediately (e.g., -$14.50)

5. Net Disbursed = Gross Settlement + Total Net Fees (because fees are stored as negative numbers, adding them is effectively subtraction)

6. No month-end fee debit needed (fees already collected)

Sample Data: Same Transactions Under Net Settlement

What this means:

• Your bank deposit today: $864.67 (already net of fees)

• Fees collected today: $25.82

Side-by-Side Comparison

This comparison summarizes how Gross Settlement and Net Settlement differ in daily deposits, fee behavior, and month-end activity. Use this table to see which model matches what you see on your bank statement and in the DFR.

For definitions of the fee and amount columns used in these examples, such as Gross Settlement Amount, Total Gross Fees, Total Net Fees, and Net Disbursed Amount, see Field Reference.

Next: Reconciliation Walkthrough