Payment Processing & FinTech Knowledge Center
Explore our verified library of Payment Processing & FinTech transactions. Every entry is reviewed for IFRS compliance and real-world accuracy by our technical accounting team.
How to Record Daily Settlement Receivables and Merchant Payables
Accounting for the 'Float' where funds are cleared by the card networks but not yet settled to the merchant's bank account.
How to Record Interchange and Scheme Fee Expenses (COGS)
Accounting for the 'Cost of Sales' paid to issuing banks (Interchange) and card networks (Scheme Fees) for every transaction processed.
How to Record a Merchant Rolling Reserve (Held Funds)
Accounting for the portion of merchant funds held back by the processor to mitigate the risk of future chargebacks or merchant insolvency.
How to Record a Chargeback and Dispute Reserve
Estimating the future loss from consumer disputes where the merchant may not have sufficient funds to cover the clawback.
How to Record Safeguarding Account Reclassifications (Restricted Cash)
Accounting for the legal requirement (e.g., UK FCA or EU EMI rules) to isolate client funds from firm operating cash.
How to Record E-Wallet Loads (Stored Value Liabilities)
Accounting for the receipt of funds from a user to 'top up' a digital wallet, creating a fiduciary liability.
How to Record Remittance and FX Spread Revenue
Accounting for a cross-border transfer where revenue is earned from the markup on the exchange rate (FX Spread).
How to Record Buy Now Pay Later (BNPL) Loan Origination
Accounting for the creation of a consumer loan where the FinTech pays the merchant upfront at a discount.
How to Record BNPL Credit Loss Provisions (CECL)
Accounting for the expected default risk on a pool of BNPL loans at the moment of origination.
How to Record Customer Referral Bonuses (User Acquisition)
Accounting for 'Invite-a-friend' rewards where the FinTech pays cash into a user's wallet to drive growth.
How to Record Interchange Revenue (Issuing Side)
Accounting for revenue earned by a Neobank or Card Issuer when their users spend money at merchants.
How to Record BNPL Late Fees and Penalties
Accounting for revenue generated when a Buy Now Pay Later user misses a scheduled payment.
How to Record Physical Card Inventory and Issuance Costs
Accounting for the cost of manufacturing and shipping physical debit/credit cards to users.
How to Record Cash-out and Withdrawal Revenue
Recording revenue earned when a user moves money out of the FinTech ecosystem (e.g., Instant Transfer to a bank).
How to Record Card Network Volume Incentives (Quarterly Rebates)
Accounting for rebates or bonuses received from Visa/Mastercard for hitting specific transaction volume targets.
How to Record Cryptocurrency On-Ramp Fees and Fiat-to-Crypto Exchange
Accounting for the revenue earned when a user purchases cryptocurrency using fiat currency within a digital wallet.
How to Record Payment for Order Flow (PFOF) Revenue
Accounting for rebates received from market makers for routing retail stock trades to specific execution venues.
How to Record KYC and AML Verification Costs
Determining whether to classify identity verification fees as Cost of Sales (COGS) or General & Administrative (G&A) expenses.
How to Record a Merchant Cash Advance (MCA) Origination
Accounting for the purchase of future business receivables at a discount, distinct from a traditional loan.
How to Record Wallet Negative Balance Write-offs (ACH Returns)
Accounting for losses when a user spends money but their original funding source fails (e.g., an ACH NSF return).
How to Record Banking-as-a-Service (BaaS) Revenue Sharing
Accounting for the split of interchange and fee revenue between a FinTech 'Program Manager' and the underlying Sponsor Bank.
How to Record FinTech Premium Subscription Revenue (SaaS Model)
Accounting for monthly or annual 'Pro' plan fees (e.g., Revolut Metal or Robinhood Gold) under ASC 606.
How to Record ATM Surcharge Revenue and Host Fees
Accounting for the revenue earned from ATM usage fees and the corresponding expense paid to the network (e.g., Star, Pulse, or NYCE).
How to Record Card Network Fines and Pass-through Penalties
Accounting for fines levied by Visa/Mastercard (e.g., for high chargeback rates) that the processor passes through to the merchant.
How to Record Cashback Rewards (Material Right vs. Marketing Expense)
Accounting for '1% Cashback' on card spend, determining if it reduces revenue or increases marketing expense.
How to Record Payment Gateway API Usage Fees (Pure Tech Model)
Accounting for revenue earned by a payment gateway that provides technology connectivity without participating in the actual fund settlement.
How to Record Tokenization and Card-on-File Service Revenue
Recording revenue for the secure storage and 'tokenization' of sensitive credit card data for recurring billing merchants.
How to Record PCI-DSS Compliance Costs and System Hardening
Accounting for the heavy expenditures required to meet Payment Card Industry Data Security Standards (PCI-DSS), distinguishing between software assets and audit expenses.
How to Record Dispute and Chargeback Administrative Fee Revenue
Recording the administrative fees (e.g., $15-$25) charged to merchants for every chargeback filed, regardless of whether the merchant wins the dispute.
How to Record Authorization-Only and Declined Transaction Fees
Accounting for revenue earned on 'Zero-Dollar' authorizations or declined attempts where the processor still charges a technical switching fee.
How to Record Interest Income on Safeguarded Client Funds
Accounting for the interest earned on restricted safeguarding accounts (the 'Float') and determining legal ownership of the income.
How to Record White-Label 'Platform-as-a-Service' (PaaS) Revenue
Recording revenue for licensing the core payment switching or wallet infrastructure to another financial institution.
How to Record Embedded Finance Partner Commissions (SaaS Splits)
Accounting for the share of processing revenue paid to a SaaS partner (e.g., Shopify) for referring a merchant and facilitating the payment integration.
How to Record Point-of-Sale (POS) Terminal Leasing (Sales-Type Lease)
Accounting for the sale and multi-year lease of POS hardware (e.g., card readers) to merchants under ASC 842.
How to Record Scheme Fee True-ups and Network Cost Adjustments
Accounting for the variance between estimated daily network costs and the final monthly bill from Visa/Mastercard.
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