Revenue Share refers to the distribution of profits and losses among stakeholders, which could be business partners, affiliates, or shareholders.
In the context of payment processing, revenue sharing can occur between merchant service providers, payment gateways, and their partners or resellers. This is often part of a broader partnership agreement where one party refers customers to another or provides some sort of value-added service.
For example, a software company might integrate a payment gateway into their product, and receive a share of the transaction fees collected by the payment gateway. Alternatively, a reseller might promote a merchant service provider to their network, and receive a percentage of the revenue generated from the referred customers.
Revenue sharing arrangements can be beneficial for all parties involved as they can help to align interests, share the risks and rewards, and leverage the strengths of each partner.
However, they also require clear and transparent agreements that outline the roles and responsibilities of each party, the calculation and distribution of the revenue share, and the handling of any disputes or conflicts.