Payouts concept

General

Payouts refer to sending cryptocurrency and token transactions from either your fiat or cryptocurrency accounts on the Txn platform to external wallets and recipients. Payouts typically include the amount, currency, payment network, and receiving wallet address of a payout recipient. Txn processes each payout request immediately to broadcast a cryptocurrency or token transaction on the relevant network as soon as possible, meaning we do not batch multiple payout requests to process them at once.

When sending payout requests, merchants need to consider the fees deducted either from the payout amount or the account balance before a transaction gets broadcast - the platform fees and network fees.

• The payout fee is the platform fee that the Txn platform charges for providing services

• The network fee is a fee taken by the Txn platform to cover blockchain fees. Txn doesn't control the blockchain fees required by miners; hence, we can only update the network fee settings on our side in a timely manner to keep it around the average blockchain fee necessary for including transactions in the next block. Please expect network fees to update frequently over time without prior notification

Fees

Merchants can use the absorbFees boolean parameter in their payout requests to control how both the payout fee and network fee are deducted. The fees can either be taken from the merchant's account balance or deducted from the payout amount itself.

Examples.

• If absorbFees is set to true, the fees are deducted from the merchant's account balance, ensuring the recipient receives the full payout amount:

$$amountCharged = payoutAmount + payoutFee + networkFee * rate$$

$$paidAmount = payoutAmount / rate$$

• If absorbFees is set to false, the fees are deducted directly from the payout amount, meaning the recipient will receive less cryptocurrency equal to the sum of the payout and network fees:

$$amountCharged = payoutAmount$$

$$paidAmount = (payoutAmount - payoutFee) / rate - networkFee$$

Regardless of the selected option, we strongly encourage merchants to thoroughly test payouts in our Sandbox environment before going live. Additionally, it’s advisable to cross-check transaction data from an accounting and reconciliation perspective to ensure your Finance and Reconciliation teams understand how transactions and fees are processed.

Limits

Another thing to consider is the minimum and maximum limits for payout amounts. You can refer to Payout Limitations.

Validations

Upon receiving a payout request, the Txn platform automatically validates the receiving wallet address format and also evaluates its risk level to ensure a payout will not be sent to a wallet connected to illegal activities or involves any sanctions-related risks for the Txn merchant. In either case, the payout request is rejected by the Txn platform straight away.

To make the customer experience even smoother for your end-users, we recommend using the Validate Address endpoint before creating crypto payouts.

Quick example:

1. Collect a wallet address from your customer

2. Make a call to validate the wallet address upfront to ensure your Create Payout call will pass without errors

3. Make a call to create a payout