Residual and Funding Policy
This Residual and Funding Policy (“Policy”) outlines the financial mechanics, calculation methodologies, and reporting standards for the partnership between Constellation Payment Processing Inc. (“Constellation”) and its Partners.
1. Overview
This Policy is incorporated by reference into the Partner Terms of Service. It outlines the financial mechanics, calculation methodologies, and reporting standards for the partnership between Constellation Payment Processing Inc. (“Constellation”) and its Partners.
2. Calculation Methodology
Residual Payments are calculated based on the net revenue generated by the Sub-merchants associated with the Partner.
Gross Revenue
The total fees collected from Sub-merchants for credit card and ACH processing services.
Net Revenue
The amount remaining after the following "Total Pass-Through Costs" and deductions are subtracted from Gross Revenue:
- Network Costs: Interchange fees, dues, and assessments determined by the Card Brands.
- Regulatory & Compliance Fees: Costs associated with AML (Anti-Money Laundering) monitoring, PCI compliance, and mandatory regulatory filings.
- Operational Fees: Underwriting, merchant boarding, and specific platform access fees.
- Losses & Liabilities: Any unrecovered merchant losses, chargebacks, or fines/penalties assessed by a payment network, sponsor bank, or regulatory authority.
Adjustments for Future Periods
Constellation reserves the right to adjust current or future Residual Payments to account for Losses & Liabilities incurred in a prior period. If such losses occur after a merchant has ceased processing or after the termination of this Agreement, the Partner remains liable for their share of such losses, which may be offset against any pending or future residual disbursements.
3. Payment Timing and Logistics
Payout Deadline
Residual Payments earned in a particular calendar month shall be issued no later than the last business day of the following calendar month.
Distribution Method
Payments may be facilitated via internal corporate ledger transfer or other established intercompany accounting methods.
External Partners
Payments are issued via ACH transfer to the bank account on file.
Tax Documentation
All Partners—including affiliated or internal entities—must provide a completed and executed W-9 Request for Taxpayer Identification Number and Certification form (or applicable international tax equivalent) prior to the release of any Residual Payments.
4. Minimum Payout Thresholds
Threshold Amount
A minimum threshold of $100.00 must be earned before a Residual Payment is triggered.
Rollover Provision
If earned residuals for a calendar month are less than $100.00, the balance will carry over to the subsequent month. Payments will remain in a "pending" status until the cumulative total exceeds the threshold.
5. Reporting and Dispute Resolution
Monthly Reporting
Constellation will provide a monthly report detailing the processing volume and the specific data used to calculate the Residual Payment.
Review Period
Partner is granted ninety (90) days from the date of the report to verify the calculations and notify Constellation of any suspected errors or discrepancies.
Finality
If no written dispute is received within the ninety (90) day window, the report and the corresponding payment shall be deemed final, accurate, and accepted by the Partner.
6. Policy Updates
Constellation reserves the right to modify this Policy to reflect changes in Card Brand Rules, Sponsor Bank requirements, or internal operational shifts. Partners will be notified of material changes to this Policy in accordance with the notice of provisions of the Partner Terms of Service.