Below is an overview of Marketplace Use Case.

Merchant Account pre-setup

*MoR stands for “Merchant of Record”, it is the entity that accepts payments from customers directly when checkout.

You can regard the Platform Merchant (Marketplace Business) account as a parent-level account and the Payout Merchant as a child-level account. Essentially, Platform Merchant (Marketplace Business) can manage all the capabilities of Payout Merchant.

Merchant Account onboarding

You have to register a "Platform Merchant (Marketplace Business)" account in KOMOJU for your business entity via KOMOJU's dashboard. Below is the overview of the steps:

1. Contact our Account Manager or send an inquiry via inquiry form to ask for a credential to log in KOMOJU's dashboard and access the "Test" environment.
2. Integrate our APIs and create mock Payout Merchant accounts under your Platform Merchant (Marketplace Business) account via our APIs. After that, create mock payments to ensure the processing works well. Ultimately, it's better to execute further tests to ensure your overall API integration works well.
3. Once you're ready to go live, please start the Live Application for your Platform Merchant (Marketplace Business) account on KOMOJU's dashboard.
4. After your Live Application passes our review, you'll be able to register a Payout Merchant account for each seller via our APIs in the "Live" environment.
5. After the application of the Payout Merchant account passes KOMOJU's review, you'll be able to start processing payments between you and your seller.

Learn more details:

• Platform Merchant (Marketplace Business) onboarding
• Payout Merchant onboarding

End to End fund flow

1. Customer checkouts on Platform Merchant's website. Simultaneously, Platform Merchant should request KOMOJU’s Payment API to pass essential payment information, instructions on how to split payments between Payout Merchants, and specify the amount of Platform Fee.
2. KOMOJU will follow Platform Merchant's API request to process the payment under Platform Merchant's account because it is the MoR.
3. The fund will be transferred to Payout Merchant after the payment is captured since that's essentially Payout Merchant's income. Besides, Platform Fee is the commission charged from Payout Merchant by Platform Merchant.
4. KOMOJU will charge the Payment Processing Fee from Platform Merchant automatically based on the fee rate in the Owned Payment Methods of Platform Merchant.
5. According to the designated payout cycle, KOMOJU will pay the accumulation of Platform Fee out to Platform Merchant's bank account and the accumulation of revenue to Payout Merchant's bank account respectively. (Note: The payout cycles for Platform Merchant and Payout Merchant are separated and can be different frequencies. You can learn more here.)

Payment processing

In Marketplace Use Case, you should adopt "Platform Processing Model" to process payments. Along with that, you're able to process a payment with a single Payout Merchant or multiple Payout Merchants.

(1) With a single Payout Merchant participant

The use case example can be Airbnb and Airbnb host, in which an order is fulfilled by a single participant. Following is an example of creating and processing a payment between you and a single Payout Merchant.

• The payment will be transferred to the Payout Merchant after the payment gets captured.
• Platform Merchant can specify the amount of Platform Fee to be charged from Payout Merchant.
• Platform Merchant pays the Payment Processing Fee to KOMOJU. The fee rate is specified in Owned Payment Methods of Platform Merchant.

(2) With multiple Payout Merchant participants

The use case example can be Uber Eats, in which an order is fulfilled by multiple participants, such as a deliverer and a restaurant. Following is an example of creating and processing a payment between you and multiple Payout Merchants.

• Platform Merchant has to specify the amount of payment transferred to each Payout Merchant. Besides, the aggregation should be equal to the total payment amount.
• Platform Merchant can specify the amount of Platform Fee to be charged from each Payout Merchant.
• Platform Merchant pays the Payment Processing Fee to KOMOJU. The fee rate is specified in Owned Payment Methods of Platform Merchant.

To learn further payment-related actions (eg: Capture, Refund, Chargeback...etc) of Platform Processing Model, please refer to Platform Processing Model (for Marketplace Use Case).

Payment Method setup and Processing Fee Rate setup

(1) Owned Payment Methods

• Platform Merchant (Marketplace Business) needs to set “Owned Payment Methods” up. It contains:
  1. The payment methods by which this Platform Merchant allows customers to checkout
  2. The processing fee rate that KOMOJU will ultimately charge from Platform Merchant in every captured payment
• KOMOJU provides 9 mainstream Japanese payment method options for Owned Payment Methods
  1. VISA/Mastercard (Japan)
  2. JCB/AMEX/Diners Club (Japan)
  3. Bank Transfer
  4. Pay-Easy
  5. PayPay
  6. LINE Pay
  7. Merpay
  8. Konbini Payment(s)
  9. 7-Eleven
• In contrast, Payout Merchant does not have any owned payment methods since it will never be a processing merchant.

(2) Payment Processing Fee

• Platform Merchant should pay the Payment Processing Fee to KOMOJU.
• Payment Processing Fee = Payment amount * payment processing fee rate. The payment processing fee rate follows the fee rate under Platform Merchant's Owned Payment Methods.
• The concept of Payment Processing Fee Rate setup

Sub-merchant management fee setup

(1) Concept

• Platform Merchant pays Sub-merchant Management Fee to KOMOJU. It is charged at the beginning of every month, and the cutoff period is the entire previous month.
• The fee rate is a fixed rate. However, the aggregation of the fee depends on how the number of “active” Payout Merchants in the previous month.
  • Definition of “active”: In any month that a Payout Merchant participated in one or more than one captured payment.

(2) Fee calculation

• Sub-merchant Management Fee = Fixed fee rate * Number of active Payout Merchants in the previous month
• Example:
  • Assume Platform Merchant has three Payout Merchants: A, B, and C. Besides, the fixed fee rate is ¥1,000.
  • Last month, A and B participated in a captured payment.
  • At the beginning of this month, Platform Merchant will be charged ¥2,000 as Sub-merchant Management Fee (¥1,000 * 2 = ¥2,000)