PSP fee estimation

Purpose

To ensure accurate fee liability and revenue visibility by:

• Applying contracted pricing rules and volume tiers to each transaction without manual calculation
• Producing per-transaction fee breakdowns and period-level summaries ready for invoice matching

Without this process, fee discrepancies go undetected until invoice review and tier thresholds can be missed.

Data sources

1. PSP transactions: Transaction-level export from the PSP back-office for the billing period.
2. Fee schedules: The contracted rate table defining what is charged per transaction category.
3. Pricing rules: Volume tier definitions and conditional overrides from the contract.

Key processing steps

1. Transaction normalization

Raw PSP records are standardized before any fee logic is applied. Amounts are converted to the billing currency, each transaction is classified by type (deposit, withdrawal, refund, chargeback, or reversal), and pending, voided, or duplicate records are excluded.

2. Fee rule matching

• Each transaction is matched to the applicable fee rule from the contract using its type, payment network, card category, and region.
• Where multiple rules qualify, the most specific match is selected.
• Transactions that are exempt from certain fees are flagged and excluded from the relevant calculations. Transactions with no matching rule are flagged as unpriced.

3. Tier evaluation

Aggregated transaction volumes for the billing period are evaluated against contracted pricing tiers to determine the applicable rate per transaction.

• Volume accumulation: Sums transaction volumes by fee type and applicable dimension (e.g. payment network, region) within the billing period
• Rate assignment: Assigns the resolved tier rate to each transaction based on the cumulative volume band it falls within. Where no tiered pricing applies, uses the flat rate from the fee schedule

4. Fee calculation

Each transaction's fee is calculated by combining the applicable flat and percentage components from the matched rule, applying any contract minimums or maximums, and reversing charges where the transaction type requires it. Chargeback fees are calculated separately as a fixed cost per dispute, regardless of the original transaction amount.

5. Aggregation

Transaction-level fees are rolled up into period summaries grouped by fee type, payment network, and region.

Outputs

1. Fee calculation: Per-transaction fee breakdown exported for the billing period.
2. Fee report: Period-level summary of total fees by type, payment network, and region. Used for invoice matching and cost reporting to management.

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