How to Set Up Dynamic Split Fee on Payment Gateway

The Dynamic Split Fee feature is a highly flexible feature that gives merchants more control over transaction fee distribution. It allows fees to be split between the merchant and the customer based on a chosen percentage. Merchants can also apply a capped maximum amount they are willing to pay for their share of the transaction fees.

This feature accommodates diverse business needs, enabling transparency in fee distribution while ensuring cost management remains predictable. Customers are informed of the split when they make payments, ensuring trust and clarity in transactions. With this feature, businesses can set up fee-sharing models that align with their operational strategies.

Step 1: Log In to the Merchant Portal

1. Visit the Hydrogen merchant portal.
2. Enter your registered email address and password.
3. Click Login to access your merchant dashboard.

Step 2: Access Profile and Settings

1. Once logged in, navigate to the top-right corner of the dashboard.
2. Click on the Profile and Settings option in the menu.

Step 3: Navigate to Settlement Settings

1. In the Profile and Settings menu, locate and select the Settlement option.
2. This will take you to the settlement settings page, where you can configure various transaction and fee-related options.

Step 4: Open Fee Transfer Settings

1. On the Settlement settings page, find the Fee Transfer Settings tab.
2. Click on it to access the Dynamic Split Fee configuration.

Step 5: Adjust the Fee Split Ratio

1. Slider Adjustment: Use the slider to adjust the percentage split of transaction fees between you (the merchant) and your customers/users.
   • For example: Set Customer Pays to 40% and Merchant Pays to 60%.
2. Manual Entry: Alternatively, you can input the desired percentage values in the input fields provided.

Customers will always see the breakdown of the split fees when they proceed to make a payment, ensuring transparency.

Step 6: Configure the Fee Cap

1. In the Payment Gateway Fee Cap section, set the maximum amount you are willing to bear per transaction.
2. Enter a fee cap:
   • For NGN transactions: Enter an amount less than ₦1,100.

Ensure the fee cap is suitable for your business needs, particularly for high-value transactions. Caps are not applicable when the slider is set to 0% (Merchant Pays All) or 100% (Customer Pays All).

Step 7: Save Your Settings

1. After making your adjustments:
   • Click SAVE to apply the new settings.
   • If you decide not to make changes, click CANCEL to discard your adjustments.
2. Any changes you make will immediately affect pending payments. Customers will be informed of the updated fee split when they proceed to make payments.

Example Use Cases

Scenario 1: Transaction with Capped Amount

Imagine a merchant that provides same-day delivery services for large appliances. They process a transaction worth ₦50,000 for a refrigerator. The payment gateway charges 1% of the transaction amount, plus 7.5% VAT on the fee, with a maximum fee cap of ₦300 set by the merchant.

• Transaction Fee: 1% of ₦50,000 = ₦500
• VAT on Fee: 7.5% of ₦500 = ₦37.50
• Total Fee: ₦500 + ₦37.50 = ₦537.50

Since the merchant has set a fee cap of ₦300, they will only pay up to ₦300 of the total fee. The remaining ₦237.50 will be borne by the customer.

When the customer initiates a payment, they will see the fee breakdown, ensuring clarity about their share of the fee.

Scenario 2: Flexible Split Without a Capped Amount

Consider a boutique store selling a dress for ₦20,000. The merchant decides to bear 45% of the transaction fee without setting a capped amount.

• Transaction Fee: 1% of ₦20,000 = ₦200
• VAT on Fee: 7.5% of ₦200 = ₦15
• Total Fee: ₦200 + ₦15 = ₦215

The merchant pays 45% of the total fee:
45% of ₦215 = ₦96.75

The customer pays the remaining 55%:
55% of ₦215 = ₦118.25

This setup allows the merchant to balance cost-sharing dynamically while avoiding the need for fee capping. Customers see the split during payment, promoting trust and transparency.

The payment gateway charges a transaction fee of 1% of the transaction amount, with an additional 7.5% VAT applied to the fee. The total fee is capped at ₦1,100 for NGN transactions, ensuring predictable charges for high-value payments.

The fee cap only applies to the merchant’s share of the transaction fee, not the customer's portion. If the merchant sets the slider to 0% (Merchant Pays All) or 100% (Customer Pays All), the cap option becomes unavailable. Customers are always notified of the fee structure and split before completing their payment. This feature ensures cost management flexibility while maintaining transparency in fee distribution.