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Design how money moves between buyers, platforms, and participants throughout the transaction lifecycle.
Your funds flow determines how payments are accepted, how funds are allocated, when participants are paid, how platform fees are collected, and how transactions are reported and reconciled. A well-defined funds flow establishes the foundation for onboarding, compliance, payouts, reporting, and operational servicing.
Begin with business flow first, not APIs.
The funds flow should be defined from a business perspective before implementation begins.
When designing a funds flow, consider:
These decisions influence onboarding requirements, compliance obligations, allocation rules, payouts, reporting, and operational processes.
The common allocation models are as follows:
Single Recipient - The full transaction amount is assigned to a single recipient.
Platform Commission - The platform retains a portion of each transaction.
Multi-Party Allocation - Funds are distributed across multiple parties according to predefined business rules.
Settlement and payout are related but distinct activities.
Depending on the platform model, payouts may occur immediately after settlement or be delayed based on business rules, reserve requirements, or payout schedules.
This example demonstrates the relationship between payment acceptance, funds allocation, settlement, and payout distribution.
Based on when you want your participant to receive fund, you can choose:
How does the platform generate revenue?
Platforms should determine how financial activity will be tracked, monitored, and reconciled throughout the transaction lifecycle.
Key considerations include:
Financial visibility requirements should be identified during design to ensure the appropriate participant, operational, and reporting experiences are supported.