How do Merchant-Initiated refunds work?

• Refunds can be initiated from the merchant side either on The Bridge or by integrating directly with the API. Refunds for UPI payments will always be adjusted against the total settlement amount to merchants’ settlement accounts on a given day.
• Settlements from Setu are always done in batches on T+1 day for UPI, with the batches essentially being a combination of Merchant ID + Settlement Account. 

So, as an example, if 100 transactions of 10 rupees were made for Merchant A with settlement account S, a single settlement of 1000 rupees (minus Setu’s charges) would be made to account S.

When the merchant initiates refunds, the refund amount will be adjusted against this batch amount. As an example, if the merchant wishes to refund 2 transactions (from the current day or from the past) worth 200 rupees each, then 400 rupees will be deducted from the 1000 rupee payout batch, and only  600 rupees will be settled to the merchant’s settlement account and the refunds worth 400 rupees will be initiated via our partner bank.