IEIM901720 - Payment of Consideration

The Model Rules states that ‘compensation is paid or credited to a Seller if it is paid or credited to an account specified by the Seller’. The account to which Consideration is paid or credited does not have to be in the name of the Seller. However, if it is not in the Seller’s name, the Platform Operator (PO) will have to report the name of the person or entity that is the account holder if that information is available to them (see 904220).

The Consideration does not have to be paid by the user (or customer) to whom a Seller has provided goods or services. Likewise, the payment does not have to be made directly to the Seller, it can be made to the PO or other entity which acts as a collecting agent on behalf of the Seller and then passes on the payment (or a part of it) to the Seller. However, to qualify as Consideration a payment must be:

• paid in connection with the Relevant Activity, and
• paid or credited to an account specified by the Seller.

In addition, the PO must know, or be able to reasonably determine, the amount of the payment made to the Seller.

There may be circumstances where amounts are paid or credited to an account specified by a Registered Seller which cannot be withdrawn, for example until a certain threshold has been met. In these circumstances the Consideration should still be considered as ‘credited’ to the Seller’s account.