Minimum Payment and Repayment Logics
For effective credit card management, it's crucial to comprehend the complexities of minimum payment and repayment logic. Our system, tailored specifically for the Americas region, incorporates several calculation methods to ensure compliance and flexibility.
Minimum payment logic options
Product configuration requires two payment definitions, each using different calculation methods. The table below presents the options in MO's system:
| Logic | Description |
|---|---|
| Percentage of Total Debt + Charges | Utilizes a percentage of the total debt and charges to calculate the minimum payment. |
| Percentage of Credit Line | Involves a percentage of the credit line in the minimum payment calculation (e.g., 5% of the Credit Line). |
| Percentage of Total Capital Debt | It uses a percentage of the capital to determine the minimum payment. |
| Percentage of Total Debt Including Charges | Considers a percentage of the total debt, including charges, for minimum payment calculation. |
| Fixed Amount | Applies a fixed amount (e.g., $20 USD) as the minimum payment. |
Multiple and Simultaneous Payment Parameters:
The system used by MO supports multiple payment parameters at the same time. This allows for the use of different types of logic. For example, an offer could have a percentage of total debt and a fixed amount of logic. The system is designed to choose the higher amount based on specific business rules, making it an intelligent and efficient way to handle payments.
Additional payment features
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Pay-off Amount: Calculates the payment required to avoid interest charges in the next billing cycle, shared with clients through API for consultation and statement generation.
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Late Payment Calculation: Dynamically calculates costs and adjusts APR conditions if a cardholder fails to make the minimum payment, applying business rules such as a higher APR after a specified number of missed payments.
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Overpayment Logic: Allows overpayments within defined tolerances, with configurable business rules to manage overpayment limits and prevent exceeding the credit line.
Payment creation
A prepayment occurs when the processor, client, or payment gateway requests an authorized transaction. Prepayments undergo various stages, as shown in the table below:
| Status | Description |
|---|---|
| Pending | Not confirmed; subject to rejection based on predefined time rules. |
| Rejected | Given to prepayments that were not completed due to reasons like insufficient funds or processing timeouts. |
| Completed | Assigned to successfully confirm payments, transforming prepayments into payments processed according to the configured payment allocation. |
You will create a prepayment in MO's system using the Create prepayment endpoint. You can configure each prepayment with a few different situations:
- Charges prioritization: Configures the order of repayment for various parameters, including principal (capital), collection cost, ordinary interests, default interests, and other costs.
- Payment Allocation Based on APR: Enables clients to allocate payments from the loan with the highest APR to those with the lowest. When two loans share the same APR, allocation prioritizes the oldest loan.
- Chronological Repayment Logic: Standard payment allocation feature, applying the amount paid by the cardholder according to prioritization confirmation and allocating it from the oldest to the newest loan.
Get Payment information
You can use the Get Customer Balance to retrieve payment details from an account, such as the deadline for payment, minimum acceptable payment, outstanding balance, total payoff amount, remaining payoff amount, and the closing date for the financial commitment.
Updated 3 months ago