Merchant Fee for Payment Plan Implementation

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Merchant Fee for Payment Plan

Merchants can offer a customer contribution model with Zip's service that includes an incremental order amount called Merchant Fee for Payment Plan (MFPP). The fee should be displayed in the checkout order summary and customers pay this amount in addition to the original order total (after shipping and taxes). The MFPP amount in the order summary is typically shown after customers choose Zip as their payment method and the total is passed through Zip and split into 4 installments when the customer checks out.


This functionality is available for USD and CAD transactions only.

Here is an example of the MFPP implemented at checkout:


This is an overview of how MFPP integrates with a merchant’s checkout flow (using the Virtual Checkout method)

  1. Customers progress through the standard checkout flow of your website.
  2. When a customer selects Zip as a payment method the Merchant’s eCommerce site should make a call to the /calculate-merchant-fees API to retrieve the MFPP fee value.

When calculating the MFPP value you need to specify the customer_state and customer_country which should be derived from the customer's shipping address.

   "currency": "USD",
    "amount": 60,
    "customer_state": "NY",
    "customer_country": "US"
  1. The /calculate-merchant-fees API response will contain the fee amount that should be added to the order, this is returned in the merchant_fee_for_payment_plan attribute. The API will also return the new order total amount including the MFPP value in the adjusted_order_amount attribute.
  "adjusted_order_amount": 64,
  "currency": "USD",
  "merchant_fee_for_payment_plan": 4
  1. The checkout order summary section should be updated to include the MFPP value as well as the order total to include the fee as per the example below.
  1. The MFPP amount and the new total order amount should be specified in the /checkouts API call.
"order": {
        "reference": "your_order_reference",
        "amount": 80.21,
        "currency": "AUD",
        "merchant_fee_for_payment_plan": 4,  
  1. Customer completes their transaction through Zip that includes the fee which is split in four equal payments over six weeks.
  2. Zip charges the merchant daily for the MFPP amount after the fact via ACH.

Merchant Fee for Payment Plan Flow of Funds

When MFPP is implemented via API integration merchants are paid out daily by Zip net of all transaction fees.

How fees are collected from the merchant

Under the Merchant Fee for Payment Plan program, Zip charges the merchant a transaction fee that may be passed onto the consumer at checkout.

Fees will be offset against daily payouts by Zip.

Zip will generate fee statements for each payout and monthly summary statements for your account which can be sent via email or accessible from the merchant portal dashboard.