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Settlement

Settlement

Settlement is the process of reconciling (debiting and crediting the organisation account) and transferring funds (within the wallets) between parties after a wallet transaction has taken place.

Settlement ensures that each organisation involved in a transaction gets paid or charged correctly, depending on their role ( Business, Merchant, B2B Merchant) and the transaction taking place.

THE ESSENTIALS

Settlement is the process whereby CRM.COM settles an organisation’s financials by generating debit and credit transactions for various activities initiated by its contacts, involving the business and its Merchants/B2B Merchants. It ensures that organisations maintain a correct financial balance after a transaction.

  • When a purchase is paid using the CRM.COM Wallet, the organisation that holds the money (e.g., CRM.COM or the business) must settle the organisation that fulfilled the purchase (e.g., the merchant).

  • When a purchase is awarded (e.g., cashback or reward), the organisation funding the award is charged accordingly, and the contact’s CRM.COM Wallet is credited.

There are two types of Settlement:

  • Business-to-Merchant Settlement - The Business settles its own Merchants and B2B Merchants,

  • Business-to-Business Settlement - The CRM.COM platform settles its tenants (Businesses). This is a closed-loop system Settlement that occurs exclusively within the CRM.COM platform.

Before explaining how Settlement works, let's get familiar with some of Settlement’s key terms.

Settlement Events

Events, performed by contacts, taken into consideration during the Settlement processes. These events include awards, spends, payouts (from the Business Pocket to the CRM.COM Pay Pocket or to the contact’s bank account), top-ups and donations.

Settlement Transactions

A Settlement transaction is the result of the Settlement process. Each Settlement transaction may multiple events (e.g. awards, top-ups) and, depending on business rules, settlement fees.

Settlement Fees

Settlement fees allow the settlement organisation (either the Business or CRM.COM) to apply configurable fees when debiting or crediting organisations. generate revenue when settlement events are performed. These fees can be applied to specific transactions, ensuring controlled financial reconciliation within the system.

Commercial Terms

The Business’s commercial agreement with each one of its merchants in which the merchant specifies their contribution for each award given. This contribution determines the amount the merchant will be debited during settlement.

Settlement Processes Explained

Business Settlement

The Business settlement is the process where the business pays or charges its own merchants (ans B2B merchants) for transactions performed by its contacts. The business debits or credits merchants for awards and spends respectively.

When a contacts makes a purchase and earns awards, then business debits the merchant at which the award takes place. If the award is given directly by the business itself, no settlement is required since the business both funds and manages the award internally. When a contact spends wallet money (including awards) the business credits the merchant that accepts the wallet money as a partial or full payment.

Settlement transactions are applied to the merchant’s active Account in CRM.COM and subsequently, money is transferred from or to their CRM.COM Wallet.

In multi-level business structures (contacts purchasing from a Merchant under a B2B Merchant), settlements flow through the B2B Business before reaching the final Merchant.

CRM.COM Settlement

CRM.COM Settlement is the process whereby the CRM.COM platform settles the Business tenants for transactions with contacts using their CRM.COM Pay Pocket or doing a B2B spend. Business accounts within the platform are debited and credited and subsequently the Organisation (Business or Merchant) wallets are paid in or paid out accordingly. Each Organisation has visibility on the account and control on their CRM.COM Wallet in the back-end’s My Business page.

CRM.COM Settlement credits Businesses and transfers money to their CRM.COM Wallet for:

  • CRM.COM Pay Pocket Spend: When contacts use their CRM.COM Wallet (cash balance) for a purchase, order, or payment

  • B2B Spend: When contacts purchase and spend at a Business using money from another Business Pocket (the destination Business is credited)

  • Top-ups: When funds are loaded into a Business or Commerce Pocket using the CRM.COM Wallet Gateway.

CRM.COM Settlement debits Businesses for:

  • Payouts from the Business to the CRM.COM Pay Pocket (e.g., an automatic payout to the CRM.COM Pay Pocket upon reward redemption).

  • B2B Spend: When contacts purchase and spend as a Business using money from another Business Pocket (the source Business is debited).

Multi-Currency Settlement

The CRM.COM Wallet Gateway is a global gateway that allows Businesses to transact in over 100 currencies. CRM.COM however, settles Businesses in three currencies - EUR, USD and GBP - aligning with the CRM.COM Pay Pocket’s supported currencies. If Businesses have a currency other than the 3 supported ones, then settlement transactions are created using exchange rates.

How to settle a Business in a multi-currency environment

Consider a Business with a base currency of TTD that enables the CRM.COM Wallet Gateway.

  • The Business’s account and CRM.COM Wallet is in one of the three supported currencies. In this example, the Business is settled in USD.

  • Contacts registering to this Business will have their account, Business Pocket and Commerce Pocket in TTD, but their CRM.COM Pay Pocket will be in USD.

  • A Contact tops-up their wallet in TTD using a payment method funding their CRM.COM Pay Pocket. In this case, the Business Pocket is credited in TTD, i.e. in the contact’s account currency, instead of the CRM.COM Pay Pocket’s

  • The Business-to-Business Settlement process settles the Business in USD based on the top-up amount. Additional fees are also applied in USD.

  • A Contact makes a payment using their CRM.COM Wallet in TTD. The payment gateway returns the equivalent amount in USD, but the transaction will be logged in TTD within the Business.

  • The Business-to-Business Settlement process settles the Business with the payment amount in USD.

Monitoring Settlement Transactions

A Business can use several tools to monitor its Settlement transactions in CRM.COM:

Financial Events

Navigate to Finance > Financial Events > set a filter for Settlement Process.

Here, a Business can view all of the Settlement transactions which were created for its Merchants by the Business-to-Merchant Settlement.

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Reports

The following Reports are available for Business users to print and inspect their Settlement-related transactions with their Merchants.

  • Settlement Analysis

  • Settlement Analysis per Product

Statement

The Business can issue the Statement for each one of its Merchants that includes their debit and credit Settlement Transactions. A Business or Merchant can see their statement by navigating to My Business > click on the options button (…) > Statement.

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Settlement Settings

To ensure that the Settlement process runs correctly, the following Business Network settings must be configured:

  • Set up Commercial Terms for each Merchant/B2B merchant

  • Business Settlement - see how to configure here.

  • Settlement Rules - see how to configure here.

Settlement Examples

Business-to-Merchant Settlement

A Business has several Reward Offers configured to award its contacts. The Business has an internal network of Merchants, and Commercial Terms are in place.

A Contact makes a purchase at a Merchant and gets a £5.00 award

  • Merchant's contribution is 0%

    • The settlement process does not debit the Merchant, i.e. the Business funds the award

  • Merchant’s contribution is 100%

    • The Merchant is debited the full award amount, i.e. £5.00

  • Merchant’s contribution is 50%

    • The Merchant is debited 50% of the awarded amount (i.e. £2.50)

A Contact makes a purchase and spends £5.00 at a Merchant

  • The Merchant is always credited the full amount spent at their location

Delegate Offers

A Merchant sets up a Delegate Reward Offer to funds the awards, regardless of where (at which Merchant) the purchase is made:

  • Merchant M1 creates a Delegate Offer.

  • A Contact purchases from Merchant M2 and receives a £5.00 award from the Delegate Offer.

  • Merchant M1 is debited for the award given rather than the Merchant M2 where the purchase occurred.

Business-to-Merchant AND Business-to-Business

Sometimes, when a contact makes a purchase, they may buy from a shop not directly owned by the business they are engaging with. For example, if a Contact buys from one Business, but the payment is processed through another, then settlements happen as follows:

  1. Firstly, the Business that owns the contact’s awards pays their Merchant (their B2B Merchant)

  2. Second, the Merchant of the second Business (B2B) pays the shop where the purchase took place

This process ensures that all parties receive the correct payments.

B2B Spend

A Business allows its Contacts to spend money from their Business Pocket at other Businesses:

  • Contact has £20 in their Business Pocket

  • Contact makes a purchase at another Business (as a guest Contact), identifies themselves and spends £5.

  • Business-to-Business Settlement credits the Business where the purchase and spending took place for £5.

  • Buiness-to-Business Settlement debits the Business from which funds were moved from.

Spending from the CRM.COM Pay Pocket

  • Contact tops up their CRM.COM Pay Pocket with £30

  • Contact makes a purchase of £100 at a Merchant of Business Tech Store and spends £5

  • Settlement processes:

    • Business-to-Business settlement credits the Tech Store Business for £5 because funds were moved from the Contact’s CRM.COM Pay Pocket to the Business pocket

    • Business-to-Merchant settlement credits the Merchant where funds of £5 were spent

  • In addition, if settlement fees are applied, then the business is also debited with a 1% fee.