What is a third-party account ?
A third-party account is a payment account used to collect funds on behalf of other parties.
In practical terms, it allows you to:
- Centralize customer payments,
- Isolate the funds of the vendors or service providers,
- Facilitate the automatic distribution of amounts owed to each stakeholder,
- Deduct commissions or service fees.
Third-party accounts are widely used by :
- Marketplaces,
- Service platforms,
- Models with payment intermediaries.
It plays a key role in managing complex financial flows.
How does a third-party account work ?
The operation of a third-party account relies on a series of key steps, each playing a role in managing payment flows.
1- The customer makes the payment on the platform
Payment is initiated via the website or app. The customer pays for their order in a single transaction, without having to manage splitting the payment among multiple recipients. This simplicity improves the shopping experience and reduces cart abandonment.
2- The funds are deposited into the third party’s account
The funds are not paid directly to the sellers. They are held in a dedicated third-party account (also called a collection account), separate from the platform’s accounts. This step centralizes the funds and prevents any accounting confusion.
3- The amounts are temporarily segregated
The funds are held in escrow for a defined period. This segregation allows for the management of legal deadlines, delivery conditions, rights of withdrawal, and potential disputes before redistribution.
4- The PSP applies the distribution defined by the platform
The rules are defined in advance. They specify the share due to each stakeholder, including commissions. Automation guarantees a reliable distribution, without manual intervention.
5- The funds are transferred to the final beneficiaries
Once the conditions are met, the funds are transferred to the accounts of the sellers or service providers. The payments are traceable and comply with regulatory requirements.
Each step of the third-party account structures payment flows, secures cash receipts and facilitates the financial management of platforms.
What are the advantages of third-party accounts for businesses?
The advantages of third-party accounts for businesses are numerous and address operational, financial and regulatory challenges.
The advantages of a third-party account are as follows :
- Centralization of payment flows : the third-party account consolidates all payments received in a single location. This centralization simplifies transaction tracking and improves the transparency of financial flows.
- Automation of fund allocation : commissions, fees or shares due to partners are calculated automatically, without manual intervention.
- Clear separation of funds : amounts received on behalf of third parties are separate from the company’s own funds. This separation strengthens financial transparency and facilitates accounting controls.
- Better management of deadlines and disputes : the temporary escrow of funds allows for the management of delivery times, refunds and customer disputes before the final payment.
- Simplified regulatory compliance : the third-party account fulfills the obligations related to collecting payments on behalf of third parties. It reduces legal risks and secures the economic model of platforms.
- Partner loyalty : payments are smooth and sellers benefit from clear, predictable and traceable payouts.
These advantages make third-party accounts a structuring lever for companies.
What does the law say about third-party accounts ?
The law considers the management of a third-party account as a regulated activity which requires either direct approval or a payment service provider approved by the ACPR to guarantee the security, transparency and compliance of financial flows.
According to the Bank of France :
“When the sums received in an account do not constitute a payment of which I am the sole beneficiary (for example: payment of the sale price of a service I provide, payment of a commission owed to me, etc.) and I am obligated to transfer all or part of this sum to a third-party beneficiary of the payment, I am acting within the framework of the execution of a payment transaction between the payer and the beneficiary of the payment.”
The law regulates the collection of funds on behalf of third parties and imposes the following rules :
- Prohibition against using a separate account : a company cannot collect payments on behalf of another party into a standard bank account. Partner funds must be kept separate.
- Authorization requirement : Managing a third-party account requires authorization as a payment or electronic money institution, or working with an authorized payment service provider (PSP). Without this authorization, it is prohibited to conduct business on behalf of third parties.
- Separation of funds : the law requires that the company’s equity be separated from funds owed to third parties. This separation facilitates audits, protects funds in case of default, and guarantees traceability.
- Traceability of flows : fund movements must be recorded and verifiable at all times. Platforms must be able to produce clear reports in the event of an audit or dispute.
- User protections : legal obligations aim to ensure that partners’ funds can never be used for purposes other than those intended.
Third-party account management with CentralPay
The CentralPay marketplace payment solution natively integrates third-party account management, simplifying the structuring of payment flows for multi-vendor platforms, marketplaces, and services.
With CentralPay :
- Customer payments are centralized in a dedicated third-party account, ensuring a clear separation between platform funds and partner funds.
- The automatic distribution of funds to beneficiaries (sellers, service providers, users, other third parties) is done according to defined rules, without manual intervention.
- Commissions and fees are managed transparently, facilitating the calculation and systematic application of business rules.
- The regulatory conditions related to collecting payments on behalf of third parties are taken care of, allowing the marketplace to remain compliant without having to obtain its own approval.
CentralPay thus offers a complete solution to orchestrate complex financial flows, reduce the risk of error and optimize payment processing via a reliable and compliant third-party account.
