The Amex Direct Settlement Deduction Fee is a specific accounting adjustment in the GuestyPay system for transactions processed directly by American Express (Amex) on your behalf.
When a merchant is set up with an Amex Direct Merchant ID (MID), transactions made using American Express are processed directly by Amex. This means that the payments are handled by American Express and settled directly to your account, bypassing the usual processing channels that GuestyPay or other payment processors might use.
The Amex Direct Settlement Deduction Fee was created to ensure that these direct transactions are properly accounted for in the GuestyPay dashboard. Here’s why:
- Data consistency: While Amex handles the actual processing and settlement, it is important to reflect these transactions in the GuestyPay dashboard's financial reports to maintain consistency and accuracy in tracking all payment activities.
- Settlement exclusion: Because Amex processes and settles these transactions directly, they should not be included in GuestyPay's settlement calculations. The Amex Direct Settlement Deduction Fee effectively offsets the transaction amount in our system, ensuring that the settlement reports do not mistakenly include these funds.
How the Amex Direct Settlement Deduction Fee works
When an American Express payment is processed, the following transactions and fees are processed.
- Charge transaction (e.g., $100): This represents the original amount of the charge that appears in the GuestyPay dashboard.
- Amex Direct Settlement Deduction Fee (-$100): This fee is applied to offset the original charge amount, reflecting that the settlement is managed directly by Amex through your Amex MID, not by GuestyPay.
- Transaction fee (e.g., -$0.30): This is the gateway fee charged by GuestyPay for enabling Amex payments if you have an Amex Direct setup.
How it's represented in GuestyPay dashboard reports
In the GuestyPay dashboard, the net result of an American Express transaction for a merchant using Amex Direct is the "Transaction fee" (e.g., -$0.30). The "Charge transaction" and "Amex Direct Settlement Deduction Fee" effectively cancel each other out, leaving only the gateway fee as the net charge recorded in our reports.
The Amex Direct Settlement Deduction Fee is a crucial component to ensure accurate financial reporting and to prevent discrepancies in settlement reports. It ensures that while all transactions are logged for record-keeping and analytical purposes, only the relevant transactions are included in the final settlements processed by GuestyPay.