Merchant Updates Blog

The Key to Getting Paid - Disbursements

Posted by Ben Kauder on Aug 9, 2017 9:10:36 AM
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getting paid.jpgOne of the big challenges software developers face but rarely fully understand is the complexity of settlements and disbursements through an electronic payments implementation.


There are many reasons for wanting to control settlement and to pay different parties for their transactions. These may include:

  • Distribution partners
  • Referral partners
  • Software offering/application fees charged as a percent of sales


But separating disbursements from electronic payments becomes difficult due to increased regulatory scrutiny. The primary roadblocks include:

  • FTC, AML, NACHA, ODFI, CFBP, MTL implications (by state) are some of the regulatory bodies that patrol anyone who is handling electronic payments or is in the flow of consumer funds.
  • Underwriting by a bank (ODFI) is critical if you want to receive all the funds and disburse them yourself. This ends up putting you in the banking business which comes with its own set of headaches.
  • FBO documentation and reporting around funds flow becomes extremely important.

That is why our payment facilitator Payfac in a Box™ solutions offers the flexibility for settlements and disbursements to go to the Bank Accounts (DDA) needed without you (the software vendor) having to take on the liability, risk, and unnecessary regulatory oversight. This is a big perk and it’s already built in!

Disbursement Perks of Payfac in a Box™:

  • The disbursement function is controlled by our unique payments APIs so that the information passed in the transaction allows for payments/settlements to be split to different accounts.
  • Gets all parties paid the most quickly and in an automated fashion so there are no extra hands involved or customer service folks involved.
  • Allows you, the software developer, to steer clear of the operational headache of going to a bank and trying to explain to them why you need to use their Treasury Management tools.
  • Keeps you out of the flow of consumer funds so you can avoid the risk and exposure of the regulatory requirements of directly touching a transaction.

So, if you are a software developer and you are currently doing 1 of 2 things:

  1. Receiving most or all the funds directly and then using a Bank Treasury Management (TM) product to disburse funds to different parties/partners in your business on a monthly or more frequent basis. 


  1. Exploring the concept of enhancing your business model or product offering to allow one payment to be settled or disbursed to more than 1 DDA/Bank Account.

Call us at 419-344-5403 or email to discuss your specific requirements and the work flow of your use case.

Topics: payfac in a box, payment faciliator, payfac disbursements, payment disbursements, disburse funds to multiple locations

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