A negative disbursement refers to a funds that are debited from a Merchant’s Account Balance, in contrast to a [positive] disbursement, where funds are credited to the Merchants Account Balance. The Account Balance, also called “available balance” is the sum of all the entries on a Merchant’s account.
Negative disbursements, also called “debits”, can be triggered for a number of reasons:
Profit Shares & Fees
Refund Processing
Incoming Chargebacks
Reserve Balances
Unique Risk Setups
A debit is triggered based the Merchant’s Account Balance. This process is designed to process a disbursement from the Merchant’s listed bank account to bring their Account Balance from a negative amount back to $0.00.
If any pending entries are active when a debit is triggered, the amount debited will be reduced by an equal amount.
Enabling Negative Disbursements
“Negative Disbursements” must be enabled as a feature before debits will be triggered to cover any Merchant’s negative balance within a portfolio. The brief steps below show how to enable Negative Disbursements in the Portal as a Platform Risk user or Facilitator-level Risk user:
Step 1: Settings → Hosts
Step 2: Select an existing Host or create a new Host to open the Host Profile.
Step 3: In the Features menu, toggle the Negative Disbursements option on.
Negative Disbursement Parameters
The Platform, and it’s facilitator-level risk users have the ability to define specific parameters that dictate the amount an account can be negative, and when a debit will be triggered to cover the balance:
Debit Grace Period
The Debit Grace Period parameter determines the number of days before a Merchant will be debited to cover their negative balance. This allows a Merchant to process more transactions or resolve other outstanding balances to become positive.
It is highly recommended that users enabling the Debit Grace Period parameter set a reasonable number of days based on their unique business model. Debit Grace Periods that are too long can lead to unpaid fees and profit shares for partners and facilitators.
Negative Balance Limit
The Negative Balance Limit parameter determines the maximum amount by which a Merchant’s Account Balance may be negative before a debit is automatically triggered.
Like above, users enabling the Negative Balance Limit parameter should ensure a reasonable amount is set. Too large of a negative balance limit can lead to similar issues.
Negative Balance Email
The Negative Balance Email parameter determines whether or not an email will be sent to the Merchant notifying them of their negative balance and the grace period they have before they are debited to make their balance positive again.
This parameter can also be modified in the Email Alerts page.
Positive Balance Email
The Positive Balance Email parameter determines whether or not an email will be sent to the Merchant notifying them that their balance is no longer negative and that the previous scheduled grace period expiration debit has been cancelled.
This parameter can also be modified in the Email Alerts page.
Modifying Parameters
The brief steps below outline how to modify the parameters listed above in the Portal as a Platform Risk user or Facilitator-level Risk user:
Step 1: From the Dashboard, open the Groups page.
Step 2: Select an existing group or create a new group to open the Group Profile.
Step 3: In the Parameters menu, click the Add Parameters button.
Step 4: In the Parameters sub-page, click the edit (pencil) button.
Step 5: Scroll down to the desired parameters and enable as desired. Click the confirm (checkmark) button when finished.