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Billing Deduction Method

Last updated 08/05/2020

How fees are deducted

Direct and Indirect deduction

In Xendit there are two main deduction types, these are called Direct deduction and Indirect deduction. The main differences between the two types of deduction are in when the deduction occurs and from which balance on the Xendit dashboard the deduction is taken from. The below table outlines the main differences between the two deduction types of Direct deduction and Indirect deduction,

MethodDescriptionDeduction TimeSettled From
DIRECTThe fees and VAT charges for the product are calculated and then deducted at the point of transaction settlement (completion)Per transaction, as it occursCash balance
INDIRECTThe fees and VAT charges for the product are calculated at the end of the month and the billing amount settled after the billing statement has been issuedAggregated, after the billing monthBilling wallet
  • Direct deduction could be more suitable if you or your company prefer a more simplified version of billing as there’s no need to settle outstanding charged
  • Indirect deduction could be more suitable if you or your company prefer to be charged on a month to month basis with a billing statement (customer invoice) summarizing all outstanding charges

Billing models available

Level pricing

The level pricing model applies the same fee per transaction for all transactions for a product. This reduces the variance of fees within the same product and the same fee will be charged for every transaction. A example calculation is given below,

Scenario,

  • Product used : Disbursements
  • Transaction count : 10,000 transactions in a single month
  • Fee rate : IDR 5,000 (per transaction)
  • Resulting fees : 10,000 * IDR 5,000 = IDR 50,000,000
  • Resulting VAT : 10% * (10,000 * IDR 5,000) =IDR 5,000,000

Total billing amount : IDR 50,000,000 + IDR 5,000,000 =IDR 55,000,000

Graduated tier pricing

The graduated tier pricing model applies a discounted fee per transaction once a certain threshold is met for a product. In Xendit we set up to three different tier prices per product, which allows customers to have lower fee per transactions as the transaction count grows. If you are interested in using the graduated tier pricing model, please reach out to your AM and/or Sales rep. A example calculation is given below,

Scenario:

  • Product used : Disbursements

  • Transaction count : 10,000 transactions in a single month

  • Fee rate settings

    • Tier 1 rate : IDR 5,000
    • Tier 2 rate : IDR 4,600
    • Tier 3 rate : IDR 4,200
    • Tier 1 ending threshold : 5,000 transaction count
    • Tier 2 ending threshold : 10,000 transaction count
  • Resulting fees

    • Tier 1 fees : 5,000 * IDR 5,000 = IDR 25,000,000
    • Tier 2 fees : 5,000 * IDR 4,600 = IDR 23,000,000
    • Tier 3 fees : 0 * IDR 4,200 = IDR 0
    • Total fees : IDR 48,000,000
  • Resulting VAT : 10% * (IDR 48,000,000) =IDR 4,800,000

Total billing amount : IDR 48,000,000 + IDR 4,800,000 =IDR 52,800,000

Products and their billing models

The following table provides an overview of what is available for each product,

ProductDeduction TypeAvailable Models
Virtual Account - AggregatorDirect or IndirectGraduated tier pricing, or Level pricing
Virtual Account - SwitcherIndirectGraduated tier pricing, or Level pricing
DisbursementsDirect or IndirectGraduated tier pricing, or Level pricing
Retail OutletDirect or IndirectGraduated tier pricing, or Level pricing
Credit Cards - AggregatorDirect or IndirectLevel pricing
Credit Cards - SwitcherIndirectLevel pricing
Fraud DetectionDirect or IndirectGraduated tier pricing, or Level pricing
EwalletDirectLevel pricing
Cardless CreditIndirectLevel pricing
QRISDirectLevel pricing
Direct DebitDirectLevel pricing
Name ValidatorIndirectGraduated tier pricing, or Level pricing