Multi-party payments: How they work and when to implement them

Oct 17 2022
Business Payments Insights

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For companies in the proptech, e-commerce and gig economy sectors, growing your business means managing multi-party payments.

However, trying to both scale and handle this intensive task manually isn’t just tedious; it’s also costly and error-prone. That’s why many firms are turning to automated alternative solutions to handle their multi-payment needs.

To help product managers and technical leads in this sector understand this powerful tool better, we’ve written this article explaining how automated multi-party payments work and how successful companies use them to their advantage. In it, we look at:

Are you ready to take your company’s multi-party payments infrastructure to the next level? Speak to us now, or check out our API documentation.

When does it make sense to implement a multi-party payments solution into your system?

Your product line is becoming complex and has multiple receiving parties

Splitting multi-party payments manually improves the payment experience, but doesn’t scale well as you develop your product.

By automating this process, though, you can continue to build your product pipeline without adding extra complexity or risk to your business.

Your current multi-payment process is becoming too much of a burden

Staying on top of your transaction volume as you grow your business can overwhelm even the most veteran reconciliation and support teams. These departments have limited resources and, faced with the pressure of executing and reconciling an increasing number of multi-party payments, fatigue and costly errors are bound to occur.

Automating this process helps to streamline your back-office, enabling them to stay on top of transactions while also improving your customer experience.

You’re ready to iterate your current, basic payment infrastructure into something more advanced

Depending on who you work with, you can build a more advanced payment model to improve your customer experience. For example, you could deploy digital wallets to give each recipient of a multi-party payment a dedicated account to store their share of the proceeds. That, in turn, makes reconciliation for all parties drastically easier.

In any case, multi-party payment solutions make bringing onboard these features efficient and scalable.

How do I know if multi-party payments are for our business?

Still having trouble figuring out if multi-party payments are for your business? Ask yourself these questions to help you find the right answer.

In my business, are we managing multiple payment stakeholders as part of our value proposition or future product plans?

If your clients accept payments from users and need to spread it to multiple recipients as part of your value proposition, then automated multi-party payments could be the right fit for you.

Are we reconciling these payments both correctly and efficiently?

If your back-office and tech support teams are struggling to keep up with growing, complex, payment volumes, you’ve likely heard about it. Automating this process can go a long way in improving the efficiency of these important teams at the core of your operations.

Are we making a lot of push payments?

Pushing multi-party payments manually requires a lot of planning and follow-up. If your teams are doing these regularly, an automated solution could help speed up and remove many of the risks in this process.

The top use cases of automated multi-party payments

Automated multi-party payments can transform industries of all kinds. Here are some of the most popular ones we’ve seen so far:


Marketplaces do more than intermediate between buyers and sellers. They need to deliver a comprehensive user experience to both parties. When a customer makes a purchase from a vendor, that money will generally be split between multiple parties.

These could include:

  • A courier or logistics company to deliver the goods (if a physical transaction).

  • An insurer who offers purchase protection or a warranty.

  • The platform for the commissions.

  • The vendor, for their net payment.

If the marketplace operates internationally, there’s a good chance that logistics companies and even insurers will change based on the geographies of both buyer and seller. Sometimes, a customer might not want to add ancillary products like insurance.

For that, dynamic user functionality can make automated multi-party payments on a marketplace easier to use.

Gig Economy platforms

Gig economy platforms connect service and goods providers with consumers who need immediate services or products. In this model, pay-ins from consumers need to pay multiple parties. For example, a food delivery platform would need to take a customer’s order payment and:

  • Pay the restaurant who prepares the meal.

  • Credit the delivery driver with their fee.

  • Reserve a tip that the customer can set at the time of order if they choose to give one.

  • Take their commission for brokering the transaction.

If the gig platform connects consumers with service providers to complete tasks, then payment can also sit in a digital wallet until both parties are satisfied with the work.


Property management platforms help landlords and real estate developers better manage their cash flows with technology. It’s common to see these tools used not only to help collect rent but also store and disperse payments for multiple costs, including:

  • Property management fees.

  • Common repairs and building funds.

  • Landlord’s income payment.

By automating these multi-party payments, each beneficiary in this chain gets paid faster and with less reconciliation involved.

You may like: Intelligent payment routing: How it works and top use cases

How Zai helps you create multi-payment infrastructure built specifically for your company’s needs

Here at Zai, we’ve been building payment solutions for over a decade now. Here’s the process we use to help our clients successfully implement multi-party payments into their products.

(Want to dig a bit deeper into the nuts and bolts of what we offer? Feel free to take a look at our API docs).

We start by learning about your business needs

Before we build anything, we sit down with you and your technical leads to learn more about your business model and existing payment flow. First, it helps us understand what your goals are and how you approach delivering your UX. Second, it enables us to help see exactly where your infrastructure stands, so we can propose an approach that fits on top of your stack and doesn’t rebuild it.

Then, we begin orchestrating the different parts of your payment flows

Making your payments work in harmony is key to successful automation. Based on our learnings, we set out to orchestrate your multi-party payments. To do so, we look at:

  • Who gets paid, and which percentages should your users receive when one of their customers makes a payin.

  • The permissions you want to set over who can execute any payouts, whether it’s from the selling party or your platform itself.

  • When payouts should occur, and how they’re split.

With a complete picture of your payment needs, we work your tech team to optimise your interactions with our APIs

Once we’re comfortable that we understand your needs, we go to work with your tech team to implement Zai’s multi-party payments tool into your system. We dedicate a large amount of this work to ensuring that the payloads sent between us are as optimal as possible based on what you need within your tech ecosystem.

We support you through your journey

As long as you’re working with us, we’ll be there to support you as your business evolves. That way, you can ensure your multi-party payments continue to operate as planned, both today and in the future.

Why work with Zai?

There are lots of services out there proclaiming to offer multi-party payment solutions. Not all of them are created equally. Here’s why our customers keep choosing Zai to power their payment infrastructure.

Our easy-to-understand payments API is under constant improvement and ready for you to test

We know that your developers’ time is one of the most important resources in your company. To that end, we’ve made great efforts to write comprehensive documentation and API references so they can get to work building without confusion.

Once your engineers are ready to build your multi-party payments product, they can test out their code or even try new features inside of our sandbox.

We’ve been building payment solutions for marketplaces, proptechs, gig platforms, and other tech-first companies for years

Zai has been helping companies build great payment solutions for over a decade. During this time, we’ve helped our customers reach new levels of success that we’re proud to share. In particular, our payment orchestration experts ensure that you’re not running around trying to figure out how to use our tools. Instead, we use our expertise to ensure you make the most of Zai’s multi-party payment tools and API, from tech all the way down to product.

We make it easy for our customers to get up and running with multi-party payments

For tech companies, time runs a lot faster than in traditional industries. As a tech company ourselves, we’re well aware of what stakes are at hand when it comes to implementing a new product while the opportunity is still hot. We’ve designed our APIs to get your multi-payment solution up and running in days, not months.

Multi-party payments are but one of our large suite of payment solutions

Over the years, we’ve built out a wide range of payment products for our customers. These include:

  • User wallets enable you to create virtual accounts for your customers to accept payins, instantly transact with each other, and payout directly to external bank accounts. These funds can stay in users’ wallets for minutes, days, or even longer.

  • Float users. Some platforms have a dynamic model where buyers and sellers either change or various recipients rotate in and out depending on the transaction. Our tools let you create, modify, and remove users automatically on predefined rules.

  • Integrations to improve your UI and UX. You put a considerable amount of time into testing and optimising your check-out UX and UI. We understand how critical this part is to your success, which is why you can integrate multiple payment options, including PSPs, via our API.

  • Compliance and fraud controls that are made for marketplaces and gig platforms. Protecting your users while reducing fraud and chargebacks goes a long way toward building trust with your audience. Our platform automatically runs these checks on transactions, keeping your users safe while guarding your business.

  • Accept multiple payment methods. With Zai, you’ll be able to accept card payments, real-time payments, and a whole host of alternative payment methods.

Zai works as a single point of integration. With one integration, you’ll have access to a suite of APIs that enables our customers to perform certain actions.

How a property management system uses an API to manage multi-party payments

Properties are complex businesses with multiple suppliers and obligations, including:

  • Investors and landlords.

  • Standard utility payments, such as lifts and hallway lighting.

  • Insurance.

  • Tradespeople and other service providers.

  • Any other financial services obligations, such as loan repayments.

Each of these providers has different payment terms, amounts, and due dates. Further, tenants come and go, with rents changing based on market conditions.

If you’re a manager trying to split each amount and transfer it onwards to multiple parties, you’ll often end up spending a lot of time calculating and executing payment requests.

If you've ever been in the manager's seat (or even spoken to one handling these multiple payments), you know how quickly this process can become overwhelming.

With Zai’s API, this becomes automatic:

  1. Once you’re set up and live with Zai’s API, you’ll be able to create a custom payment flow.
  2. Within the flow, you can assign each entity a user ID on both sides of the payment equation.
  3. Then each user, including the tenant and all the suppliers, gets a unique digital wallet, which acts as an account which is directly linked to the customer.
  4. Through Zai's dashboard or via an API request, you can set rules for how to split and pay each payment event, which we call an item.Split payments_1@2x (1)
  5. Then, by the logic set in the system, the payments move both effortlessly and instantly between e-wallets to the respective parties.many-to-one_1 (3)

many-to-one_2 (2)Now, you/ can send the money in the wallet to the supplier's bank account, optionally taking your commercial pricing fee at the same time.

From the perspective of a property management system, the steps in Zai's multi-party payments function look like this:

  1. Once onboarding is complete, the tenant, landlord, and other suppliers are set up as a user and wallet account in Zai's payment platform.
  2. Zai's direct debit or other payment method pulls the rent from the tenant into their wallet.
  3. Using the rules set by Zai's customers, the API then divides up the amounts owed to each supplier and moves those funds into their respective wallets. So here, the landlord would get their net rent payment, the property management company its commission, and the remaining utility and handy bills credited.
  4. Depending on who needs payment, and when the API will transfer the funds to the respective bank accounts. As Zai connects directly to multiple payment clearing systems, these transfers settle in one to three days.

You’ll just need to set the rules for each multi-party payment split, which you can do via our APIs.

Of course, the real estate rental sector isn't the only one to benefit from Zai's split payments API. We've seen use cases in marketplaces, online exchanges, and even B2B suppliers in the fast-moving consumer goods space apply our tools to great success.

Why automating your multi-party payment flow is key to meeting your growth goals

How you choose to manage multi-party payments will go a long way in lowering your costs, increasing user experience, and winning customers.

At Zai, we have a proven track record of helping companies with complex payment needs bring their infrastructure to new levels with multi-party payments. Contact us today to find out how we can transform the way your company handles payments.

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