Please note the MLM Soft is not a financial institution, thus MLM Soft platform don't provide any payment processing, but commission calculations and transactions management.

We user a concept of virtual wallets for this. Each account have 1 or more virtual wallets (possibly in different currencies). Each wallet is a set of transactions: incoming and outcoming.

You may think of it as of your banking account, except there's no actual money involved, just data.

Understanding transactions

There might be different types of transactions of a virtual wallet. Let's explain the most basic ones:

- Commission Calculation

- Payout

- Store Payments

Application of calculation commission to a wallet

Commission calculation is an incoming transaction that applies certain type of commission (depending on your custom compensation plan algorithm) to a wallet. 

For example, you have something called Recruiting Bonus in your comp plan. So once its conditions fulfilled, the Compensation Plan Engine calculates the bonus, and then adds it as a separate transaction to a receivers virtual wallet.

Depending on your comp plan configuration, commissions can be added to a wallet in real-time or on a period closing, for example monthly.

So there will be a transaction on an account's wallet:

+100 – Commission Engine – 'recruiting bonus for 123 John Doe'

And the wallet's balance will be a 100.

Meaning of wallet's balance

Because this is a virtual wallet, not a real one, this balance simply means that you as a company owes that amount of money to this user. Because the commission is calculated according to your comp plan, and it was confirmed and approved, either in real-time if it's suitable, or on commission period closing, but the user don't get this money yet.

Payout

Depending on your business flow the platform can support different payout scenarios. You may find more here.

In relation to a virtual wallet idea, each payout request once it's created, creates an outcoming transaction:

-50 – Payout – 'payout requested via ACH by an admin'

It's important to understand, that the transaction is created when payout request is just created, not when it's processed. That deducts an amount from a wallet so this money can't be requested twice, or used in a different way. 

If payout transaction is cancelled the amount will automatically be sent back to a wallet, again, as a separate transaction, so you can track full history.

Wallet balance becomes 50 after that transaction (+100 -50 = 50)

Store payments

Another typical way of using virtual wallet is store payments, or store credits. This means that you may want to allow your network members to use their earned commission for their future purchases on your online store.

MLM Soft Cloud Platform having its full-scale open API can be integrated with your online store checkout process, allowing a user to use their virtual wallet balance towards a purchase. It may be configured in different ways: you may not allow them to pay 100% of an order with virtual wallet for example.

In terms of your online office order management this applied virtual wallet funds will be recorded to an order as a discount or a coupon.

In terms of virtual wallet management in the platform it will add another outcoming transaction to a wallet:

-30 – Purchase – 'coupon_d2ef22 used for the order N 322 of 9/1/22'

Wallet balance becomes 20 after that transaction (+100 - 50 - 30 = 20)

Multiple wallets 

The platform supports an unlimited number of wallets which can be configured in a different way for its own purpose.

It may depend on your compensation plan requirements. For example, you may want to use something like 'Bonus Wallet' and 'Savings Wallet' in your comp plan.

Some of the commission will go to that Bonus Wallet from where they can be used for store purchases or be withdrawn. Some of the commissions will go to the Savings Wallet with different usage scenario.

Most common case when you use multiple wallets though it's when you operate on a multiple markets with multiple currencies.

Currencies

Each wallet has it's own currency. It's defined during platform's configuration. 

Because we're talking about virtual wallet this currency is only used internally to keep your own records intact. 

For example you operate in the US and Mexico. So you have (at least) 2 wallets configured: 'Bonus Wallet USD' and 'Bonus Wallet MXN'.

This means that you most certainly use some 'points' or 'CV' system in your comp plan to support transborder sponsoring. So all the commissions calculated in CV, and then when it's time to apply it to a virtual wallet it's sent to a specific wallet depending on payee's country. 

There also might be a certain (your own) exchange rate applied. It's a part of your custom compensation plan. For example, bonus CV to USD can be 1:1, and bonus CV to MXN can be 1:20.

Another important thing in relation to wallet's currencies is that it isn't necessary an actual currency. You can use your own 'internal' currency, 'points', 'tokens', anything. It basically depends on your comp plan and your actual payout instruments.