Receive Credit Card Payment


I have scenario here. I sell things online and most of my customer would pay via credit card and/or online bank transfer. I am using an online payment gateway solution where all online payment such as credit card and online bank transfer will be credited in my special account held by the Payment Gateway company. Here are a couple of questions I have:

  1. I setup a Cash Account for the abovementioned account so whenever I receive online payment, it will be recorded in this cash account. Then at the end of every month I will treat my withdrawal from this account as a money transfer to my normal bank account under Cash Accounts. Is this the correct way to do it?

  2. If above is the correct way, I still have a small problem and not sure if I can automate it or not. The payment gateway will charge me 3% for every payment. So if the payment from my buyer is $100, the payment gateway company will pay me $97. How and where to record this $3 difference? In terms of automation, I was thinking to treat the 3% as ‘tax’ during Receive money under Sales Invoice.

Hope I am making sense here and appreciate any points from the community here.


Your 1 is correct

As for 2, when you sell online do you (i) create a Sales Invoices or do treat them as (ii) Cash Sales ?
Also does the gateway give you (a) 97 or does the gateway give you (b) 100 and charge the 3 separately.

If (i) and (a), when doing the banking put to Accounts Receivable 100 and on an Add a line put to a Credit Card Charges account -3, note the minus sign.

If (ii) and (a), you could ignore the 3 and just have sales of 97, or have sales of 100 and on an Add a line put to a Credit Card Charges account -3, note the minus sign.

If (b) take it up as a Spend Money with account Credit Card Charges

You would not use Tax

I would create an ‘expense’ account (eg: ‘PaymentGateway Charges’) and use the ‘spend money’ button to allocate it since all payment made to you (either credit card or IBG) are directed to the gateway.

Yes, if the charges were separately itemised.
But if the charges are deducted before the payment is directed to the gateway - nett rather then gross - then you need to make the adjustment via Receive Money.


Thanks for the pointers. They are really helpful. Now I just need to wait for the statement from the payment gateway company to see how the show the records, whether it’s (a) or (b) to determine the best way to record my transaction. Thanks!

I have a similar problem. when I receive a payment vía Credit Card the bank deducts: 1 Bank Commission 3% 2. Witholds Sales Tax 5% 3. Withholds income tax percentage. 2% So If following the above example if the sale is for 100 the bank will deposit only the reminder sy 90. I need to keep record not only of the commission but also of the taxes as I need to deduct them on my tax reports as front payments. What is the correct way to register this transactions.

You have not provided enough information, especially about the sales tax. Is the sales tax on your sale to your customer, or is it a tax on the bank’s service to you? And is the income tax withholding calculated on the subtotal (before taxes) of the sale or the total including tax? How much, in total, did your customer pay to the bank?

Provide a more detailed example explaining exactly how much everyone involved pays to whom.

In the Credit Card receipt you would allocate deducts as per below - note the minus signs.

The bank commission will be P&L account while the tax accounts would be BS accounts

Thank you for your response. I also charge sales tax on my sales Invoice, a different rate of 13%. So for this sale on the tax transacciones report I would like to see the detail of the sales tax 13% - the withold tax of the credit card. following the example for the 100 sold my tax to pay would be 13 - 5 = 8 . How can I configure it ? If I include those 5 to the tax account on the transactions report it would deduct a 13% over the 5 as if this was the original amount.

The sales tax on the sales invoice is a “charge” - sales levy.
The withholding sales tax on the credit card is a “deduction” - financial adjustment.

Only “charges” being Customer or Supplier are recorded in the tax transaction report.
However, the BS Tax Payable account will record both the “charges” and the “deductions”.

This means that you can’t produce a report which matches the account balance.

Hi. Actually I did. Created another tax deduction called Withhold Tax and said it was 100%, so that the amount recorded is 100% tax and charged it to the same Taxes to pay account so both taxes are detailed on the report.