TechnologyCore · ~40 minWorking draft · 10 sheets · 870 formulas

Payments processing and monetisation model

TPV, gross receipts, pass-through, net take rate, float. Build a payments company from processed volume by channel and region, take it through gross receipts and the pass-through costs to net revenue and the net take rate, to costs, EBITDA and free cash flow, roll the settlement float forward, and value the company on forward multiples and a DCF.

By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.

On this subject: payments processing and monetisation model.Updated 30 October 2026

Who builds it, and for whatThe model a fintech or payments analyst builds for a merchant acquirer or payment platform, and the one a growth investor or banker builds before a round, an IPO or an acquisition. It answers the question that separates payments from every other technology business: of the money that flows through the company, how much is its own revenue once the card ecosystem has been paid, how fast that net revenue grows as volume grows and prices fall, and what the money it holds for merchants on the way through is worth.

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Inspect the workbookPayments processing and monetisation model · Working draft · 10 sheets · 870 formulas

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Every value, every sheet, as the workbook holds it.

	A	B	C	D	E	F	G	H	I	J
1	Assumptions
2	TPV in $bn; revenue and costs in $m; take rates and pass-through costs in basis points (bp) of TPV.
4	Year	Unit		FY0A	FY1E	FY2E	FY3E	FY4E	FY5E	Notes
5	Year number	#		0	1	2	3	4	5	FY0A = 0. Drives growth, price changes and discounting.
7	Scenario
8	Scenario	#	1	1 = base, 2 = upside, 3 = downside. Sets volume growth, price compression and the yield on the float.
9	Volume growth adjustment, base	pp	0.0%	Added to every line’s growth rate.
10	Volume growth adjustment, upside	pp	4.0%
11	Volume growth adjustment, downside	pp	-6.0%
12	Volume growth adjustment, selected scenario	pp	0.0%
13	Gross take rate compression, a year, base	bp	1.0	Merchants renegotiate; the pass-through does not fall with it.
14	Gross take rate compression, a year, upside	bp	-
15	Gross take rate compression, a year, downside	bp	3.0
16	Gross take rate compression, selected scenario	bp	1.0
17	Yield on the settlement float, base	%	3.5%
18	Yield on the settlement float, upside	%	4.0%
19	Yield on the settlement float, downside	%	2.0%
20	Yield on the settlement float, selected scenario	%	3.5%
22	Processed volume
23	E-commerce, Europe: TPV, FY0A	$bn	40.00
24	E-commerce, North America: TPV, FY0A	$bn	35.00
25	Point of sale, Europe: TPV, FY0A	$bn	25.00
26	Point of sale, North America: TPV, FY0A	$bn	20.00
27	Platforms, Europe: TPV, FY0A	$bn	15.00
28	Platforms, North America: TPV, FY0A	$bn	25.00
29	E-commerce, Europe: TPV growth, a year	%	18.0%
30	E-commerce, North America: TPV growth, a year	%	20.0%
31	Point of sale, Europe: TPV growth, a year	%	12.0%
32	Point of sale, North America: TPV growth, a year	%	10.0%
33	Platforms, Europe: TPV growth, a year	%	30.0%
34	Platforms, North America: TPV growth, a year	%	32.0%
35	E-commerce: average transaction value, FY0A	$	70.00
36	Point of sale: average transaction value, FY0A	$	32.00
37	Platforms: average transaction value, FY0A	$	110.00
38	Average transaction value growth, a year	%	1.0%
40	Take rates and pass-through costs
41	E-commerce, Europe: gross take rate, FY0A	bp	115.0	What merchants are charged: the merchant discount rate, % of TPV.
42	E-commerce, North America: gross take rate, FY0A	bp	265.0
43	Point of sale, Europe: gross take rate, FY0A	bp	95.0
44	Point of sale, North America: gross take rate, FY0A	bp	230.0
45	Platforms, Europe: gross take rate, FY0A	bp	85.0
46	Platforms, North America: gross take rate, FY0A	bp	215.0
47	Europe: interchange	bp	40.0	Paid to the card issuer on every card payment. Consumer interchange is capped in Europe.
48	Europe: scheme fees	bp	12.0	Paid to the card networks.
49	Europe: acquiring and network costs	bp	5.0	Paid to partner banks and networks for access and settlement.
50	North America: interchange	bp	175.0	Not capped on consumer credit cards in the US; a blended rate across cards.
51	North America: scheme fees	bp	14.0
52	North America: acquiring and network costs	bp	5.0
54	Other revenue
55	Issuing revenue, % of platforms TPV	bp	10.0	Cards issued to platform users: interchange earned net of issuer costs.
56	Cross-border share of e-commerce TPV	%	25.0%
57	Foreign exchange spread on cross-border TPV	bp	35.0
58	Value-added services, % of net transaction revenue	%	10.0%	Fraud tools, payouts, data and reconciliation sold on top of processing.
60	Costs and hiring
61	Processing cost per transaction	$	0.01	Data centres, network and transaction processing.
62	Hosting and cloud, % of net revenue	%	4.0%
63	Fraud and chargeback losses	bp	0.6	Losses the company bears when a merchant cannot cover a chargeback or fraud.
64	Employees, end of FY0A	FTE	2400
65	Headcount growth	%			10.0%	9.0%	8.0%	7.0%	6.0%
66	Cost per employee, FY1E	$k a year	165.0	Salary, bonus, benefits and share-based pay.
67	Growth in pay and central costs, a year	%	4.0%
68	Sales and marketing, % of net revenue	%	6.0%
69	Central and other costs, FY1E	$m	60.0
71	Settlement timing
72	Days in the year	days	365
73	Days until the card schemes pay the company	days	1.0
74	Days until the company pays its merchants	days	2.2	Average across merchants on daily and weekly payouts.
76	Capital spending, working capital and tax
77	Capital spending, % of net revenue	%	5.0%	Capitalised software and data centre equipment.
78	Depreciation, % of opening PP&E	%	30.0%
79	PP&E, end of FY0A	$m	70.0
80	Accrued costs, days of cash costs	days	30
81	Accrued costs, end of FY0A	$m	25.0
82	Tax rate	%	25.0%
83	Corporate cash, end of FY0A	$m	300.0	The company’s own cash. Settlement funds held for merchants are not included.
84	Shares outstanding	m shares	80.0
86	Valuation
87	Peer EV / FY1E net revenue, low	x	5.0x
88	Peer EV / FY1E net revenue, mid	x	7.5x
89	Peer EV / FY1E net revenue, high	x	10.0x
90	Peer EV / FY1E EBITDA, low	x	16.0x
91	Peer EV / FY1E EBITDA, mid	x	21.0x
92	Peer EV / FY1E EBITDA, high	x	26.0x
93	Risk-free rate	%	4.3%
94	Equity beta	beta	1.30
95	Equity risk premium	%	5.0%
96	Terminal growth	%	3.0%

Select a cell to see its row, its schedule and the type of cell. Font colours: blue for inputs, black for formulas, green for links to other sheets. Scroll sideways to see every period.

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Payments processing and monetisation model: the workbook

An Excel workbook with working formulas, no macros and no external links: the same model you can work with on this page.

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The worked model: 10 sheets and 870 live formulas, all 10 schedules built and linked, every check reading zero. Change an input in Excel and the whole model moves.
The starter: The same inputs and layout with the take rate and pass-through: gross receipts to net revenue left blank for you to build, each blank cell marked. The worked model is its answer.

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What the base case says

Processed volume (TPV), FY1E ($bn): 191.70
Gross receipts, FY1E: $3,283.9m
Net revenue, FY1E: $1,079.1m
Net transaction take rate, FY1E (bp): 44.98
EBITDA margin, FY1E: 41.2%
EBITDA margin, FY5E: 49.9%
Incremental EBITDA margin, FY5E: 63.9%
Settlement float, FY1E: $616.8m
Value per share, DCF ($): 98.21
Value per share, mid EV / EBITDA ($): 120.43

Read from the workbook as served, every input at its default. Periods: FY0A, FY1E, FY2E, FY3E, FY4E, FY5E. The figures are invented and move with whatever you type in.

What this model is

A five-year model (FY1E to FY5E, from an FY0A actual year) of a fictional merchant payments company that processes card payments online, in stores and for software platforms, in Europe and North America. Every figure is invented.

Three numbers are kept apart on every sheet. Processed volume (TPV) is the value of the payments moved for merchants: billions, and not revenue. Gross receipts are what merchants are charged. Net revenue is gross receipts less the pass-through costs owed for each payment: interchange to the card issuer, scheme fees to the card network and acquiring costs to partner banks. Net revenue over TPV, in basis points, is the net take rate.

A North American merchant pays a gross rate more than twice a European one, because consumer interchange is capped in Europe and not in the United States. Net take rates are much closer. That is why investors compare payment companies on the net rate, and why a gross revenue figure can make a company with more North American volume look larger than it is.

Money passes through the company on its way to merchants: the card schemes pay it about a day after a payment and it pays merchants about two days after. The difference is a float held for merchants, rolled forward on the Settlement sheet, that earns interest for the company but is never its own cash.

Set Scenario on the Assumptions sheet to 2 (upside) or 3 (downside) to move volume growth, price compression and the yield on the float together.

Seats: Equity research and hedge funds, Investment banking, Venture capital, Product and technology.

Careers that do this work: growth equity, venture capital, equity research, corp dev / m&a, bizops / strategy & ops.

Sheets in the workbook

Cover. How to read it, the conventions, the sheet map.
Assumptions. Scenario selector, TPV by channel and region with growth, transaction values, gross take rates, interchange, scheme and acquiring costs by region, other revenue, costs and hiring, settlement timing and float yield, tax, capital spending and valuation inputs.
Volume. Processed volume (TPV) by channel and region, totals by channel and by region, transactions and average transaction value.
Take Rate. Gross receipts, pass-through costs and net revenue by line; interchange, scheme fees and acquiring costs; gross and net take rates; other revenue and total net revenue.
Income Statement. TPV, gross receipts and net revenue side by side; cost of revenue, gross profit, people and other operating costs, EBITDA, incremental margin, D&A, float interest, tax and net income.
Settlement. Amounts due from card schemes and to merchants, settlement receivables and payables, the float held for merchants and the interest it earns.
Cash and Valuation. Capital spending and PP&E, accrued costs, free cash flow and corporate cash; forward EV / net revenue and EV / EBITDA on a peer range; WACC and the DCF.
Sensitivity. EBITDA margin by net take rate and volume growth; value per share by EV / EBITDA multiple and net take rate, with the workings beneath.
Sources. The basis of every assumption. All figures are invented for a fictional company.
Checks. TPV by channel and region, gross less pass-through equals net, settlement balances, margin identities, PP&E, cash and grid centres. Each should read zero.

How the schedules connect

Every row in the workbook is tagged with the schedule it belongs to; the inspector above shows the tag when you click a row. These are the schedules this model is made of and where each one lives.

Processed volume: TPV by channel and region

TPV, transactions and average transaction value

Assumptions, rows 23–38 · Volume, rows 6–13 · Volume, rows 16–23 · Volume, rows 26–33

Take rate and pass-through: gross receipts to net revenue

Interchange, scheme fees, acquiring costs, net take rate

Assumptions, rows 41–52 · Assumptions, rows 55–58 · Take Rate, rows 6–35 · Take Rate, rows 38–49 · Take Rate, rows 52–57 · Income Statement, rows 6–11

Operating costs and margins

Cost of sales, opex, EBITDA

Assumptions, rows 61–69 · Income Statement, rows 14–19 · Income Statement, rows 22–30 · Income Statement, rows 33–44

Settlement balances and the float

Due from schemes, due to merchants, the float

Assumptions, rows 72–74 · Settlement, rows 6–7 · Settlement, rows 10–16 · Settlement, rows 19–21

Capex and depreciation (PP&E roll-forward)

Opening, plus capex, less depreciation, closing

Assumptions, rows 77–81 · Cash and Valuation, rows 6–9

Tax

Tax on profit, and tax on operating profit

Assumptions, row 82 · Income Statement, row 41

Enterprise value to equity value

Debt off, cash on, per share

Assumptions, rows 83–84 · Cash and Valuation, rows 53–55

Discounting and terminal value

Discount factors, two terminal methods, reconciled

Assumptions, rows 87–92 · Assumptions, row 96 · Cash and Valuation, rows 12–21 · Cash and Valuation, rows 42–50

Cost of capital (WACC)

CAPM, after-tax debt, target weights

Assumptions, rows 93–95 · Cash and Valuation, rows 38–39

Sensitivity tables

Two assumptions at once, without a data table

Sensitivity, rows 5–7 · Sensitivity, rows 10–15 · Sensitivity, rows 18–25 · Sensitivity, rows 28–39

What you should be able to explain

Why processed volume, gross receipts and net revenue are three different numbers, and why investors compare payment companies on the net take rate.
What interchange, scheme fees and acquiring costs are, who receives each, and why they are passed through rather than kept.
Why a merchant in North America pays a far higher gross rate than one in Europe while the net rates are close.
How settlement timing creates a float that belongs to merchants, earns interest for the company and must never be counted as its cash.
Why payments has steep operating leverage: processing costs scale with transactions while people and central costs do not.

What a reviewer looks for

Calling processed volume or gross receipts revenue, which overstates the business many times over.
Comparing gross take rates across regions or companies, when the pass-through differs and only the net rate is comparable.
Adding settlement cash held for merchants to the company’s cash in the equity bridge.
Valuing on EBITDA that includes interest on the float without saying so, or applying a peer multiple on a different definition.
A single growth rate for all volume, so the mix between channels and regions, and with it the take rate, cannot move.

Conventions this workbook uses

Stated on the cover sheet too. A model is only as trustworthy as the decisions it tells you it made.

Annual periods. FY0A volumes, rates and balances are inputs; the forecast runs FY1E to FY5E. Each line’s TPV grows at its own rate plus the scenario adjustment.
Take rates and pass-through costs are in basis points of TPV (1 bp = 0.01%). Interchange, scheme fees and acquiring costs are set by region; gross take rates by channel and region, less the scenario’s compression in every forecast year.
Revenue is recognised net of pass-through costs, as an agent, so net revenue is the top line every margin is measured on. Gross receipts are shown so the difference is visible.
Settlement: amounts due from card schemes are TPV less interchange and scheme fees, settled after the scheme days; amounts due to merchants are TPV less gross receipts, paid after the merchant days. Settlement cash is payables less receivables, held for merchants, excluded from corporate cash and from the valuation; interest on its average balance is earned by the company.
EBITDA excludes float interest. Tax is charged on profit before tax including float interest, with no credit for a loss. Free cash flow is EBITDA plus float interest, less tax and capital spending, plus the increase in accrued costs. There is no debt, so nothing is circular.
The forward multiples apply a typed peer range to FY1E figures. The DCF discounts free cash flow from each year end at the cost of equity and adds a perpetuity growth terminal value; corporate cash at FY0A is added to reach equity value.
The sensitivity grids rescale the year’s own lines: a different volume growth scales every line’s TPV by the same factor, keeping the mix, and a different net take rate moves every line’s gross rate by the same number of basis points.

Build it yourself

The starter workbook

The take rate has been cleared: gross receipts, pass-through costs and net revenue by line, the totals from gross receipts to net revenue, the take rates in basis points, other revenue, and the three numbers at the top of the income statement. Rebuild them from the Volume and Assumptions sheets. The Checks sheet shows when gross receipts less pass-through costs equal net revenue line by line.

Blanks: Take rate and pass-through: gross receipts to net revenue. Download it beside the worked model.

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Vocabulary: Take Rate, Basis Points (bps), Enterprise Value (EV), Free Cash Flow (FCF), WACC (Weighted Average Cost of Capital), Terminal Value.

Questions about this model

What is the difference between TPV, gross receipts and net revenue?

TPV is the value of payments processed: $191.7 billion in FY1E. Gross receipts are what merchants are charged on it: $3,284 million, a gross take rate of 171bp. Most of that is owed to the card ecosystem: $2,422 million of interchange, scheme fees and acquiring costs. What is left, $862 million of net transaction revenue (45bp of TPV), plus $217 million of other revenue, is the company’s net revenue of $1,079 million.

Why is the gross take rate so different between Europe and North America?

Because interchange is. Consumer card interchange is capped in Europe and not on US credit cards, so a North American e-commerce merchant here pays 264bp in FY1E against 114bp in Europe. Almost all of the difference goes to card issuers: the company keeps 70bp in North America and 57bp in Europe.

What is the settlement float, and whose money is it?

Card schemes pay the company about a day after a payment; it pays its merchants about two days after. In between it holds merchants’ money, $617 million at the end of FY1E, about 1.2 days of TPV. The company earns $19.8 million of interest on it in FY1E, but the money belongs to merchants, so it is kept out of the company’s cash and out of the equity bridge.

How sensitive is the value to the net take rate?

Very. At the mid peer multiple of 21x FY1E EBITDA the shares are worth $120.43; 5bp less net take rate, with the same volume, takes that to $95.52, a fifth lower, because almost every basis point lost comes straight off EBITDA. The DCF gives $98.21, at 17x FY1E EBITDA.

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