Deposits influence when your users get paid out. Adyen holds these deposits to protect your users from settlement uncertainties in case of extreme scenarios, such as the COVID-19 pandemic. By holding the necessary funds, we can consistently maintain the cash outflow without having to block payouts during unforeseen events.
Calculating the deposit
Adyen estimates the exposure that we have for your users based on transaction data. This process runs daily before payouts, to ensure that the exposure on the merchant accounts does not exceed the current coverage by more than EUR10,000. If the total exposure exceeds the total coverage by more than EUR10,000, then Adyen automatically withholds funds from your user's next payout to cover the exposure.
Transactions coming from prepaid reservations, that are then refunded, do not impact the liability exposure. This means that if your user has a prepayment for a reservation coming in 5 months, the value of the reservation will increase the exposure. However, if this prepayment gets refunded, then the value of the transaction will be deducted from the exposure.
Deposit types
Standard deposit
This deposit calculation uses a fixed fulfillment time assumption to calculate the fulfillment exposure.
Delivery date deposit
This deposit type is applicable for users operating in industries related to travel, events, and hospitality. In these industries the fulfillment time can differ substantially between transactions, and it is therefore not possible to create a reliable estimate of the average fulfillment time, which impacts the exposure calculation significantly.
To solve this complexity, Adyen has developed a dynamic model that uses the actual fulfillment times for each transaction to calculate the risk exposure. The actual fulfillment time is passed on to Adyen with each transaction as Level 3 data, including the date of the event/flight/hotel check-in. We use this data to calculate the value of all unfulfilled transactions at a given time.
For example, if a ticket for a concert is purchased, the delivery date or the date the concert is to take place is also provided, so Adyen knows exactly when the ticket has been fulfilled.
View deposit details
To check the deposit details of your users, you need to have the following user role:
- Merchant financial
To check deposit details:
- Log in to your live Customer Area, and switch to the merchant account.
- Go to Finance > Balances (Merchant).
- Select the Deposit tab.
Optimize your user's deposit
The deposit is calculated algorithmically and it is consistently applied to all merchant accounts in your platform. However, there are some ways you can optimize your user's deposit amount.
- Omnichannel payment solution: You can implement Adyen's point-of-sale solution for your user in addition to the ecommerce offering. Point-of-sale transactions have zero order fulfillment time and lower chargeback and refund rates, which lowers the required deposit amount.
- Manage chargeback rates: As chargeback exposure is based on historical chargeback data, a reduction in the chargeback rate in your user's merchant account will lead to a reduction in the deposit requirement.