Split payments and its importance in a business

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Making payments is something so common and recurring in our daily lives that we often don't realize, or even stop to think, about everything that goes on behind that transaction. In fact, it's very interesting to think that during the few seconds in which a payment is processed, there are so many factors and activities happening in parallel.

Since this is a chain involving several entities, it is important that they are all working in accordance and as expected. Bank, brand , acquirer , commercial establishment; there are many fronts that need to be aligned for a simple transaction to be carried out successfully.

Currently, credit card transactions account for 60% of household consumption expenditure payments throughout Brazil. In 2021, credit card purchases grew 33.1%, moving R$2.6 trillion (data from the Brazilian Association of Credit Card and Services Companies - ABECS ) and even with the resumption of physical payments throughout 2022, card transactions are expected to close the year at a level of R$3 trillion in movement.

With this rapid growth, it is increasingly important for tunisia mobile phone number establishments to be able to scale their operations in a simple way and, at the same time, ensure that customers are served quickly , transparently and efficiently.

It is in this context that we introduce the concept of split payments. Also known as “Split Payments”, Split Payments is a set of APIs that allow you to split a business’s payments between one or more participants at the time of sale. It works by creating business rules (each establishment defines its own) and enables standardized implementation for in-person, digital or boleto payment transactions.

In the scope of digital payments, this is a feature that serves e-commerce very well . According to Ebit/Nielsen, e-commerce grew at an intense pace in Brazil last year; 41%. In the marketplace, growth was also quite significant and reached the mark of 52%. The isolated segment registered 148 MM orders and totaled revenue of R$ 73.2 billion. Given such significant growth, Split Payments is becoming a much more common feature.

In addition to e-commerce, Management Software (ERP) also greatly benefits from Split's functionality. Since many of its clients have a business model that involves different recipients (such as hairdressers and manicurists in beauty salon management software and doctors in healthcare software, etc.), Split comes in as a competitive differentiator that favors and enhances the solution of these companies.

Physical payments are also equally relevant when we talk about Split. They are an extremely expressive front, and their representation has been growing over the years. According to ABECs, in 2021 alone, cards moved R$2.5 trillion (an increase of 24.5% compared to the previous year).

In this case, Split will assist, simplify and streamline the day-to-day operations of these two fronts.

But what is Split Payments?
As previously mentioned, Split Payments is a feature that allows a transaction to be divided into two or more parts between its respective recipients. It is a solution that provides freedom, flexibility and security for a commercial establishment.

At the time of purchase, the transaction is divided (as a percentage or in reais) and each recipient (including the establishment itself) receives their respective share according to the established rule. The rule can be defined as a percentage of the sales value, by type of operation or even number of installments, and thus, commissioning becomes more dynamic and efficient.

Payment rules are agreed upon between the platform/marketplace and its retailers in the case of the online world and between the retailer and the establishment's recipients in the case of the physical world. Both parties define a percentage of commission, fees and responsibility for the shipping cost; all of this without the consumer being aware of this bureaucratic procedure.

As a result, the flow ensures a much more enjoyable experience for the customer, from the moment of browsing/searching for items to completing the purchase (checkout).

This way, everyone involved in a Split Payments operation – whether marketplaces, ERPs or stores – can optimize processes and dedicate their time to their own business. In addition to providing clearer visibility of the money coming into the account, the process also contributes to tax management and regulatory compliance for those involved.

And in practice, how does it work?
A beauty salon uses a management platform to record its payments and cash flow . The salon's customers come to the establishment looking for services such as haircuts, manicures, pedicures, and waxing, each performed by a different professional.

Let's say the customer in question has had three different procedures performed. At the time of finalizing the purchase, the payment split will act to divide the amounts at checkout between the beauty salon and the three professionals involved in the sale of the services. After the split is completed, each professional will receive the amount corresponding exclusively to their service.

In this example, although we are talking about a physical world transaction, we can see the similarities with the structure of an e-commerce that also provides transparency for the buyer and seller.

In practice, when this customer's payment is authorized by the bank, the payment split functionality divides the amounts according to the transfer amount determined by the establishment, collecting its percentage and passing on the excess amount to the professionals.

It is worth noting that this division of values ​​is all done automatically, without manual interventions, which increases the scalability of the business, facilitates the financial management of the salon in question and helps the store owner to manage their day-to-day activities.

One of the main partners of the Stone Partner Program is Trinks, an ERP for beauty salons. With more than 750,000 customers spread across 350 cities in the country, Trinks' day-to-day operations become much more efficient with the use of Split, as can be read in this article.