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We are a bit geeky when it comes to payment technology, but the thing that excites us the most is helping to grow your business – so are some useful tips from us to you.

If there’s a topic we’ve missed, let us know, and we will be happy to dive into it.

A guide to eCommerce split payments

If you need information about split payments, you’ve come to the right place. Continue reading to discover more about split payments, including:

  • The meaning of split payments
  • The current state of split payments
  • Split payments for bank card payments
  • The benefits of split payments
  • And more

What is a split payment?

A split payment is a type of transaction that enables merchants to divide single transactions amongst multiple customers.

For instance, imagine a couple equally splitting the cost of a car journey on the ride-sharing app Lyft. While one partner might opt for a credit card payment for half the amount, the other may want to use their debit card for the remaining amount. This type of split payment is known as split acceptance and is a merchant-sourced feature.

Split acceptance is nothing new to businesses such as supermarkets, retail shops, and hospitality venues. That’s because, at most modern tills, cash registers, and self-service shop checkouts, you can pay for different amounts of your shopping with a mixture of bank cards, gift card vouchers, shop loyalty rewards or card points, staff discounts, and cash.

But when it comes to online transactions, split payments can be tricky as some merchants haven’t adapted their payment gateways to accept multiple or split payment sources, such as more than one debit card or credit card amount.

The other type of split payment is called split payout, and it is a payment service provider (PSP) or gateway-sourced feature. Imagine a customer buys three items (A, B, and C) from three different merchants on an eCommerce marketplace but pays for them all at once. So:

  • Item A from merchant 1 costs £50.
  • Item B from merchant 2 costs £100.
  • Item C from merchant 3 costs £150.
  • The total cost of a cart = £300.

With a split payout feature, a PSP will process the whole transaction and ensure that each merchant gets their corresponding funds from the sale minus the commission that the eCommerce marketplace takes.

A marketplace payment gateway like Fondy does this by transferring the appropriate funds from a platform account to an eCommerce marketplace revenue account and to individual merchant Wallets.

From merchant Wallets 1, 2, and 3, Fondy can then transfer funds to individual merchant bank accounts. Depending on the business model, these transfers can be instantaneous, every three days, weekly, or at a predetermined frequency.

The current state of split payments

Currently, many merchants will let customers split payments (split acceptance) in-person in their shops but not online. One of the reasons is that a lot of the existing online technology hasn’t caught up to modern eCommerce. Multiple payment methods usually mean multiple technological components, card networks, and systems are required. This further increases the risk of delays and complications for both the shop merchant and the customer.

The cost (to merchants) of verifying multiple payment methods for a single transaction is another reason that many eCommerce sites steer away from offering this feature to their customers.

As a result, many online merchants won’t allow you to split your payment, except for discount codes where personal identification isn’t necessarily required. If split payments online are essential for your business model, it’s worthwhile speaking to an expert who can point you in the right direction.

Fortunately, thanks to newer payment gateways and PSPs, the technology around offering simplified split acceptance is becoming increasingly widespread. That’s because payment gateway and PSPs that have split acceptance enabled also have the ability to handle transaction and order administration in addition to potential credit card chargeback issues. This helps because the fact your business is technically taking more transactions during a split payment increases the risk of chargebacks.

Grow sales with a better global payment solution

Fondy helps expand your business locally and internationally, allowing you to accept payment methods such as split payments, mobile card payments, make instant payout payments, and more through a single API. Get started on your frictionless payments journey with Fondy today.

The benefits of split payments

Apart from using various methods to pay a single payment, the advantages of split payments (acceptance) are wide-reaching.

Avoid chasing repayments

Split payments eliminate the need for one party or customer to settle payment and then have to request repayments later on.

Prevents credit card fees

Helps prevent card users or customers from spending above their credit card limits by offering multiple payment sources.

Refund management

Split payments can help capture refund splits between multiple customers or user accounts.

Split payment transactions

As previously stated, some split payment transactions are already common with customers within hospitality and retail during in-person sales. However, splitting transactions (acceptance) online over more than one credit card or payment method is becoming increasingly useful within the following industries:

  • Tourism and leisure.
  • Gifting, such as a wedding or bridal registry.
  • Property and motoring.

How do split payments work for eCommerce and online merchants?

To process online payments such as split payments, businesses and merchants need a merchant account and a payment gateway or PSP. The gateway or PSP is the entity during the transaction that encrypts the customer payment details and facilitates the transaction by communicating with the acquiring bank.

The gateway or service provider is also the facility that will make split payments possible, so finding the best gateway or payment service provider for your requirements is key.

Fondy is the perfect payment service provider for businesses of all sizes

Benefit from multiple online payment methods, including Open Banking, card payments, and split payments across 300+ banks in the UK and EU, and give your customers complete flexibility. Create a Fondy account and start enjoying quick, friction-free, cross-border payment solutions today.


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