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About Net Settlements

  • Updated

Contents:

  1. Overview
  2. How it works
  3. Net Settlement vs Direct Debit vs Invoice
  4. Net Settlements not enabled for your business
     

 

Overview

 

Net Settlement is a settlement approach where Affirm deducts eligible fees and adjustments from a settlement payout and sends the net amount to you instead of collecting fees/adjustments separately.

 

Below you will find more details about how Net Settlement works and the difference between the types of disbursements.

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How it Works

 

Affirm will calculate your Net Settlements by:

  • Sales/captures
  • Refunds/servicing adjustments
  • Disputes and dispute-related holds/resolutions (where applicable)
  • Merchant fees
  • Fee adjustments/true-ups
     

Affirm will generate a settlement report (daily, weekly, or monthly) to support reconciliation and initiate the payout, where the final amount settled includes deductions for fees and refunds. 

 

Learn more about reading and reconciling your settlement reports.

 

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Net Settlement vs Direct Debit vs Invoice

 

You will have three fee collection/settlement methods depending on your balance with Affirm:

  1. Direct Debit/Net Settlement is the default method if you are a Direct API-integrated merchant.
    • If you have a positive balance with Affirm at the time of a negative transaction event (i.e. a refund or dispute) you will see the funds deducted from a positive settlement.
  2. If you do not have a positive balance when those events occur, you will be debited for the negative balance.
  3. Net settlement is not available to VCN-integrated merchants as Affirm does not settle funds to those merchants directly.
    1. If you are a VCN-Integrated merchant, you will receive payments by your card processor. The only options to pay your fees are:
      • Invoice
      • Direct Debit
  4. Invoice is only available for eligible VCN-integrated merchants.
     

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Net Settlements not enabled for your business

 

Depending on your business integration, fees are reflected as deductions from payouts resulting in netted settlement. For some platform-mediated or split-capture flows, those methods may not be available, and invoicing or a platform-specific settlement process may apply.

 

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