Dual Merchant Compensation

Merchants receive compensation in two layers, designed to minimize their visible upfront margin (tax base) while providing meaningful economic incentive via the back-end rebate.

Layer 1 — Agent Commission (Upfront, from Customer)

The merchant charges end customers a small markup on top of the face value equivalent. This is their declared commission revenue.

End customer pays: face_value_equiv_in_fiat + agent_commission
Agent commission = face_value × agent_commission_pct (e.g. 0.1% – 2%)

Example:
  Cheque: $100 USDC
  EUR/USD rate: 0.92 → face value = €92.00
  Agent commission: 0.5% → €0.46
  Customer pays: €92.46
  Merchant keeps: €0.46 (declared revenue, taxable locally)
  Merchant remits to issuer: €92.00

The agent_commission_pct is set by the merchant and is their minimum viable margin. The platform should track this for reporting but does not enforce or collect it — it’s between the merchant and their customer.

Layer 2 — Rebate (Post-Settlement, from Issuer)

After the merchant successfully settles a period (remits face value to issuer), the issuer pays a rebate as an incentive. The rebate is structured as a percentage of the settled volume and may be tiered by volume.

Rebate = settled_volume_usdc × rebate_pct

Example:
  Settled volume: $10,000 USDC
  Base rebate: 1.5% → $150.00 rebate
  Volume tier: >$50k/month → 2.0% rebate

Why rebate, not a higher commission

• Commission is visible to end customers and creates local tax exposure for the merchant
• Rebate is a B2B payment from a foreign entity, typically with different (often more favorable) tax treatment
• Rebate is contingent on settlement, incentivizing merchants to settle promptly
• Rebate rates can be negotiated per merchant without changing the customer-facing price\

Rebate trigger conditions

• Merchant must have settled the period (payment confirmed)
• Rebate is calculated after settlement_delay_days from payment confirmation
• Rebate is paid in USDC (on-chain) or in fiat by wire, per agreement\

Combined Merchant Economics

Sold: 100 cheques × $100 = $10,000 USDC face value
Customer payments: €9,246 (at 0.92 EUR/USD + 0.5% commission)

Merchant remits to issuer: €9,200 (face value equivalent)
Merchant keeps: €46 (agent commission — declared revenue, taxed locally)

Issuer pays rebate: $150 USDC (1.5% of $10,000 settled)

Merchant total income: €46 + $150 ≈ $200 equivalent
Effective yield: ~2.0% on volume (with low declared tax base of €46)