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Expected Count - Discrepancy Rates ("bad debt", "volatility", "confidence level")

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Expected Count

This is the amount of messages that txtNation estimate as payable on this line.

txtNation work on a 'transparency for all' model.

Pay-outs can often differ from the Reported count due to things like Bad Debt (i.e. not all users pay for their phone bills)

This is worked out as follows;

Reported Count * Historical Percentage Payout on a network line = Expected Count

For example, if the reported count for a line is 100 and the Historical Percentage Payout on this line is 97%. The number of expected messages would show as 97.

It is important to note, that this is a rough estimate for guidance only and it not intended to be an exact indicator of the payout due. 

In essence, this is a summary of all clients we have processing on the txtNation billing network during this time period. 

txtNation process expected % every 3 months (quarter) to give a real-time trend based on market data as part of our global transparency on reporting.

 

Why do you not "Expect" to get paid 100% of the reported revenue?


"Discrepancy" is the difference between messages showing as successful reported transactions and actual operator payout. A discrepancy is normal in several markets.

 

It is important to note, that where a network reported that they billed for a particular message, it does not mean that this will definitely be paid.

Typical reasons for a discrepancy include:

- Bad debt, where a consumer does not pay their bill. This can sometimes come as a batch from providers every quarter for instance, or it can be compensated in some months where you might receive more to pass on when they do recover the debt.

- Refund rates, where consumers have successfully sought a refund via their network operator. Again this can be applied by operators every month, or in a batch once they've reconciled.

- AIT (Artificially Inflated Traffic), where networks detect fraudulent traffic on the line, the money is not paid or clawed back from subsequent purchase orders. See http://clients.txtnation.com/entries/307938-artificially-inflated-traffic-ait-fraudulent-traffic for more information.

- Percentage deductions can be made to the amounts received from billing connectivity providers, including but not limited to service fees and charges, Network fees, administration charges, currency fluctuation deductions, chargebacks, fines, penalties, returned items, payment delivery fees and taxes not processed in previous payments. 

- Also, on rare occasions, networks could change the classification of delivery reports which could lead to messages being reported as a financial message incorrectly.

 

 

Therefore, to account for the above factors we reduce the amount we typically expect to get paid by a percentage.

 

The XLS below shows what percentages we typically expect to be paid for all countries affected. If the rate is higher than shown on the attached .xls, we will look into it with operators and find out the reason. 

 

* For our Discrepancy Rates (%), please see attached .xls

Last updated: 27.02.15 (James Riley, txtNation)

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