What is Split Funding
Split funding is an option that merchants have for their transactions to be processed and deposited into multiple accounts. Traditionally, credit card processing simply deducted a fee then sent the rest to a single account. With split funding, merchants can setup a pre-defined split percentage into multiple bank accounts. For example, a merchant can have 80% of their deposits go into Bank Account A, and the reaming 20% into Bank Account B.
Why Choose Split Funding
There are a few ways to use split funding to benefit your business. Typically, it is used to send money from a transaction to two or more bank accounts. A common scenario in which the benefit of split funding is significant is when merchants charge convenience fees. If your business charges a convenience fee, split funding can help. Convenience fees can go into one bank account and the transaction sale amount into another.
How Split Funding Works
At Paragon Payment Solutions, Split funding is setup during the merchant application process, or can be added as a feature at any time during the merchant processing relationship.
Split funding amounts are pre-defined at the merchant account level by determining what percentage or amount of each transaction should go into which bank accounts.
Like all funding solutions, splitting transactions can have some challenges. For example, if the transaction is refunded, ensuring all the funds are returned can be difficult. The same concern applies to who will pay fees.
Discover more about the powerful payment processing features offered by Paragon Payment Solutions. Contact us with any questions or to get started.