Reconciliation & Settlement

ItPay's four-party model requires robust reconciliation processes to ensure all parties agree on transaction records. Since ItPay does not touch money, reconciliation is purely informational — verifying that what each party recorded matches reality.

The Three-Way Match

Every transaction involves three independent records:

• Channel — the payment provider's transaction log (source of truth for money movement)
• ItPay — the platform's routing and calculation records
• Merchant — the payee's own records of what was received

flowchart LR
    A[Channel<br/>Transaction Log] --> D{Reconciliation<br/>Engine}
    B[ItPay<br/>Routing Records] --> D
    C[Merchant<br/>Receipt Records] --> D
    D --> E["✅ Match<br/>No Action"]
    D --> F["⚠️ Discrepancy<br/>Alert + Investigation"]
    D --> G["❌ Missing<br/>Exception Workflow"]

Reconciliation Schedule

Type	Frequency	Description
Auto-reconciliation	T+1 (daily)	Automated comparison of channel, ItPay, and merchant records
Callback verification	Real-time	Verify webhook callback payloads against on-chain records
Channel statement	Monthly	Download and reconcile official channel settlement statements
Merchant report	On-demand	Merchant can trigger reconciliation for any date range

Settlement Flow

Settlement follows the channel-direct model — money flows from the channel directly to the merchant, bypassing ItPay entirely.

Channel-Supported Split (Recommended)

Some channels (WeChat Pay, Alipay) support automatic splits:

{
  "transaction_id": "txn_01HXYZ...",
  "total_amount": { "currency": "CNY", "value": 100.00 },
  "splits": [
    {
      "account": "acc_merchant_01H...",
      "amount": { "currency": "CNY", "value": 99.30 },
      "type": "merchant_settlement"
    },
    {
      "account": "acc_itpay_platform",
      "amount": { "currency": "CNY", "value": 0.70 },
      "type": "platform_fee"
    }
  ],
  "settlement_method": "channel_split",
  "settlement_time": "T+1"
}

Manual Invoice (Fallback)

For channels that don't support splits, ItPay invoices the merchant monthly:

Channel Settlement Date: T+1
├── Merchant receives: 100.00 CNY (full amount)
└── ItPay invoices:    0.70 CNY (platform fee, due within 30 days)

Invoice Cycle: Monthly / Quarterly (configurable)
Payment Methods: Wire transfer, crypto (USDC)

Splitting Methods Compared

Method	Channels	How It Works	ItPay Fee Collection
Channel Split	WeChat Pay, Alipay, PromptPay (selected banks)	Channel automatically splits funds at settlement	Collected automatically
Manual Invoice	All other channels	Merchant receives full payment, ItPay sends monthly invoice	Merchant pays separately
Crypto Direct	USDC/USDT	On-chain settlement, smart contract splits	Collected on-chain

Discrepancy Resolution

When a discrepancy is detected, the reconciliation engine follows this escalation:

1. Level 1 — Automated Retry (within 1 hour)

   • Re-fetch channel transaction via API
   • Re-query merchant records
   • If resolved → closed

2. Level 2 — Alert (within 24 hours)

   • Notify merchant via email/webhook
   • Notify ItPay operations team
   • Mark transaction as under_review

3. Level 3 — Manual Investigation (within 72 hours)

   • ItPay ops reviews all three records
   • Coordinates with channel provider if needed
   • Resolution: adjust records, initiate refund, or escalate to dispute

Best Practices for Merchants

• Log all ItPay API responses (especially payment_intent_id and amounts)
• Store webhook callback payloads with raw headers for signature verification
• Implement idempotency — the same callback may be delivered multiple times
• Run your own daily reconciliation against ItPay's exported reports