Gross or net funding, and which one you can actually reconcile.
Net funding deducts fees from every deposit, so no deposit ever matches a day's sales. Gross funding pays you in full and debits the fees separately. Same money, and only one of them is reconcilable.
What this page settles.
Three questions, in the order most people ask them.
What the two arrangements are
Two ways of collecting the same fees, and most merchants have never been told there is a choice.
Net settlement, also called daily discount. Your processor deducts its fees from each deposit before it reaches you. You take $2,000 in card sales on Tuesday and roughly $1,942 lands on Thursday. Every deposit, every day, arrives short by an amount you did not calculate.
Gross settlement, also called monthly discount. You are deposited the full amount of your sales, and the month’s fees are debited separately — usually as one ACH debit in the first few days of the following month, sometimes as a same-day separate line.
The total cost is identical. This is not a pricing question. It is a bookkeeping question that turns out to matter a great deal.
Why it matters more than it sounds
Here is the practical consequence, and it is the whole argument.
Under net funding, nothing you receive matches anything you can check. Tuesday’s sales were $2,000; Thursday’s deposit was $1,941.37. Is that right? To know, you would have to calculate the exact fees on that specific batch, with that specific card mix, including whatever downgraded. Nobody does this. So the deposit is accepted as whatever arrives.
Which means a fee that should not be there, a rate that quietly moved, or a batch that settled badly is invisible. Not hidden — invisible, because there is nothing to compare against. This is the single most common reason a wrong fee sits on an account for two years.
Under gross funding, every deposit should equal a day’s card sales exactly. When one does not, you have found something. The fees arrive as one number you can read, question and compare month to month.
That is the difference: one arrangement makes an error findable in week two, and the other makes it findable never. How to read a merchant statement.
The cash-flow difference
Smaller than people expect, and worth stating accurately rather than overselling.
Under gross funding you hold the fee money until the monthly debit. On a business paying $1,200 a month in fees, you are holding an average of roughly half a month’s worth — about $600 — a few weeks longer than you would under net. Real, and not transformative.
The one case where it matters more: a business with tight month-end cash flow now faces a single sizeable debit on a predictable date rather than a continuous trickle. For most that is easier to plan for; for a few it is a lump that lands badly. Know which you are before switching.
What does not change is your funding speed. Gross or net, the deposit timetable is the same. Funding times.
Who offers which
Net is the default at most traditional processors, and often the only option offered unless you ask.
Gross is widely available and is a standard choice at some providers — Helcim publishes it as an explicit option, letting you pick gross or net, with fees appearing as a separate same-day line under gross.
Aggregators are net by design. Square, Stripe, PayPal, Shopify Payments and SumUp all deduct per transaction, and there is no gross option because the model does not have one. That is part of the simplicity trade: the fee is visible on each transaction in the dashboard, which is a different and also reasonable way of making it legible.
Some processors will set gross up on request even when it is not advertised. It is worth asking, in those words: “can I be funded gross, with fees debited monthly?”
How to reconcile either one
On gross funding, weekly, ten minutes. Take each day’s card sales from your point-of-sale system and match it to the deposit. They should agree exactly. Investigate any day that does not. Then once a month, read the fee debit and compare it to last month’s.
On net funding, you cannot match deposits, so do it at the month level instead. Total card sales for the month, total deposits received, and the difference is your total fees. Divide that by volume and you have your effective rate — the figure that lets you compare this month to last and your deal to anybody else’s. The calculator does it from those two numbers.
That monthly check is the minimum viable version. It will not catch a problem in week two, but it catches one within a month, which is enormously better than never.
Either way, write the number down. An effective rate you recorded last month is what makes this month’s rise visible. Why the bill went up.
What to ask for
Three questions, of your current processor or any you are considering.
“Am I funded gross or net?” Many merchants do not know, and the answer is often not obvious from the statement.
“Can I be funded gross, with fees debited monthly?” The direct request. Plenty of processors will simply say yes.
“If not, can I at least get a daily fee breakdown?” Some will provide a report reconciling each deposit to its fees, which is the next best thing.
And if you are shopping, add it to the list you ask every provider, alongside the term, the fees and the hardware arrangement. It costs nothing and it is one of the few things that makes everything else on your statement checkable. Comparing two quotes.
What we charge
Interchange + 0.50% + 10¢ in person, interchange + 0.75% + 25¢ keyed, with no contract, no monthly fee and no monthly minimum.
We will fund you gross if you want it, and we will tell you plainly that it makes our fees easier for you to scrutinise, which is the point of offering it.
While we are on the subject
Does gross settlement cost more?
No. The same fees are charged either way; only the timing and visibility differ.
Why do my deposits never match my sales?
Almost certainly net funding — the fees are deducted from each deposit before it reaches you. It is the default at most processors.
Can I switch to gross funding?
Often yes, by asking. Some processors offer it as a standard option and some will set it up on request. A few do not offer it at all.
Which is better for cash flow?
Gross is marginally better, because you hold the fee money until the debit. The difference is small; the bookkeeping difference is not.