Accounting Principles Update
The terms of your services agreement with Adyen, which may be titled Adyen for Platforms Agreement, AfP Agreement, MarketPay Agreement, Franchisor Agreement, Payment Facilitator Agreement, or other similar title, will be supplemented with the following wording, intended to clarify Adyen’s accounting treatment of Scheme Owner, issuing bank, and third party Acquirer imposed fees which Adyen passes through you, its customer. This clarification is required to ensure that Adyen’s accounting treatment and regulatory reporting of such pass-through fees is fully in compliance with the laws and regulations applicable to Adyen as a regulated bank and publicly listed entity (including IFRS reporting requirements).
This supplemental language does not change the fees agreed in your services agreement and associated pricing schedule or interrupt or otherwise change Adyen’s provision of the Adyen Services to you, rather it clarifies our accounting of such fees. There will be no operational, technical, or commercial impact for you as a result of this update.
Note, your specific agreement with us may reference you as Marketplace, Platform, Payment Facilitator, by your legal name, or under other similar categorization. For clarity we have used the term customer and you in this communication and associated terms.
This update will take effect upon the later of (i) one month after 7 February 2023, or (ii) the date prescribed by any notice requirements in your contractual agreement with us.
The processes for authentication, Authorisation, acquiring, clearing and settlement of Transactions, to Adyen, are controlled by and are the responsibility of the third party Acquirers, Scheme Owners, and issuing banks and are subject to the Scheme Rules set by the Scheme Owner(s). Adyen acts in its own name and does not have primary responsibility for services provided by these third parties and does not control the services provided by third party Acquirers, issuing banks and Scheme Owners.
Within the context of the overall Adyen Services provided to Adyen’s customers, Adyen’s acquiring services are to be seen as a distinct service from the services performed by Scheme Owners and other connected parties (such as third party Acquirers or issuing banks), as determined by the applicable Scheme Rules. The acquiring services allow customers to use the Scheme Owners’ networks and services for its own benefit and that of its Sub-Merchants, as applicable.
More specifically, Adyen’s acquiring services include the following:
accepting Transactions and routing the same to the relevant third party Acquirer, Scheme Owner or issuing bank;
collecting and settling the resulting funds to customers and sub-merchants, as applicable;
transmitting pass-through fees, including Scheme Owner costs, to customers where interchange plus plus (sometimes referred to as interchange ++ or interchange plus) pricing is agreed; and
reconciliation services for Transactions acquired and settled via Adyen, reconciling processed Transactions with settlements received from the relevant third party Acquirers, Scheme Owners and issuing banks.
Customer acknowledges that if a third party Acquirer, Scheme Owner or issuing bank does not timely or correctly settle funds to Adyen, Adyen does not have any control over timely settlement or correction of incorrect settlement by such Scheme Owner, issuing bank, or third-party Acquirer. Adyen will however on request, on a best efforts basis (without guaranteeing a successful outcome) and on behalf of all of its customers, request settlement and/or correction of an error by a Scheme Owner, issuing bank or third party Acquirer.
Payment Methods may be priced under a Blend Model or an Interchange++ Model. Your commercial agreement will specify applicable fees.
The blend model is a pricing model whereby Adyen charges customers a single blended fee consisting of an Adyen fee and pass-through fees, the estimated fees and other charges (including applicable taxes) imposed by third parties in relation to the Services and passed on to customer via Adyen (e.g. issuing bank interchange fees, Scheme Owner fees, and third party Acquirer fees), on each Transaction (“Blend Model”). The Blend Model does not include Processing Fees, which are charged separately. Where the Blend Model is specified in the commercial agreement, customer acknowledges that prices for such Payment Methods are offered by Adyen based on Adyen’s then-current cost basis (including Scheme Owner and/or third party Acquirer costs, Transaction traffic characteristics provided by customer, and currency exchange costs, if applicable). If Adyen’s cost basis materially changes due to external circumstances (e.g., Scheme Owner and/or third party Acquirer costs or currency exchange costs) or due to customer’s actual Transaction traffic characteristics materially differing from the figures provided by customer (e.g., different types of Transactions, such as cross-border or corporate cards with higher underlying Scheme Owner rates), notwithstanding anything to the contrary, Adyen has the right to proportionally adjust the blend fee by notifying customer, such notice to include reasonable substantiation of the reason for such adjustment. The aforementioned shall not allow Adyen to adjust the blend fee for changes in Adyen’s internal cost basis (e.g., infrastructure or staff costs). In the blend fee model, any charges and/or fees from the relevant Scheme Owners, issuing banks, and/or third party Acquirers are collected on behalf of such third parties by Adyen.
The Interchange ++ Model is a pricing model whereby Adyen charges customers both pass-through fees, estimated fees and other charges (including applicable taxes) imposed by third parties in relation to the Services and passed on to customers via Adyen (e.g. issuing bank interchange fees, Scheme Owner fees, and third party Acquirer fees), and a specified Adyen fee, on each Transaction (“Interchange ++ Model”). The Interchange++ Model does not include Processing Fees, which are charged separately. Where the Interchange++ Model (sometimes referred to as interchange plus) is specified in the commercial agreement, customer acknowledges that the pass-through fees will be borne by customer, including any increase or decrease thereof. The pass-through fees will be reflected as a separate line item in customer's invoice. Adyen’s fees are applied on top of such pass-through fees. The current Scheme Owner interchange pricing level is published by the Scheme Owners.
Pass-through fees are collected by Adyen on behalf of Scheme Owners and payable by customer to Adyen. The acquiring mark-up, an Adyen fee, is agreed between Adyen and customer as the compensation for Adyen’s risks and efforts related to the acquiring of Transactions for the customer. Customer acknowledges that the pass-through fees are set by third parties, not by Adyen.