--- title: Finance, how marketplace finance works slug: finance-how-marketplace-finance-works icon: {"faIcon":"fa-brands fa-wordpress"} docTags: createdAt: 2026-05-22T14:05:00.237Z --- # Microsoft Marketplace, how payments work A practical guide for finance teams when your company transacts through Microsoft Marketplace. Covers who invoices whom, how taxes are handled, how the money flows, and how long the cycle takes. ## Summary - Microsoft is the seller of record. They invoice the customer, collect payment, and handle taxes per local jurisdiction. - The publisher (ISV) does not invoice the customer. The publisher receives a single net payout from Microsoft after Microsoft collects. - Microsoft retains a 3% transaction fee, or 1.5% for correctly flagged private offer renewals. - Microsoft pays publishers on the 15th of the month following customer collection. - No collection from the customer means no payout to the publisher. ## The three parties | Party | Role | | --------------- | ---------------------------------------------------------------------------- | | Publisher (ISV) | Owns the software, sets the price, publishes the offer. Receives net payout. | | Microsoft | Invoices the customer, collects payment, remits taxes, pays the publisher. | | Customer | End buyer. Pays Microsoft, not the publisher. | The customer's accounts payable is with Microsoft. The publisher's accounts receivable is from Microsoft. The customer and publisher have no direct billing relationship through Marketplace. ## The end-to-end flow 1. Publisher creates the offer in Microsoft Marketplace (typically via WeTransact). 2. Customer accepts the offer. 3. Microsoft invoices the customer, in local currency, with applicable taxes. 4. Customer pays Microsoft per the contract's payment terms. 5. Microsoft retains its fee (3% or 1.5%). 6. Microsoft pays the publisher around the 15th of the month following collection. ## The transaction fee | Scenario | Fee | Publisher receives per $100 | | --------------------------------------------------------------- | ---- | --------------------------- | | Any transaction, public or private offer | 3% | $97.00 | | Renewal of a private offer, flagged correctly in Partner Center | 1.5% | $98.50 | \:::warning For the 1.5% renewal rate, the publisher must check "This is a renewal" when creating the private offer in Partner Center. The discount applies for the full term. If the box is missed, the standard 3% applies and there is no retroactive correction. \::: ## Taxes In most countries, Microsoft is the Merchant of Record. Microsoft calculates, collects, and remits VAT, GST, or sales tax to the local authority, and provides tax-compliant invoices to the customer. In a smaller list of publisher-managed countries, the publisher is responsible for tax registration, collection, and remittance. Microsoft only lists the offer. The full country breakdown (Microsoft-managed, publisher-managed, and reseller countries) is maintained by Microsoft here: [Tax details for Microsoft Marketplace.](https://learn.microsoft.com/en-us/partner-center/marketplace-offers/tax-details-marketplace) ## The "collected" rule Microsoft pays the publisher only after Microsoft has collected from the customer. Even if the order is marked Won, the customer has been invoiced, and the due date has passed, the publisher is not paid until the customer's payment actually lands at Microsoft. You can monitor this in Partner Center, under Marketplace Insights, Revenue Dashboard. The status moves from "Invoiced" to "Paid", which then triggers the next payout cycle. ## Payment scenarios The timing from purchase to payout depends on the customer's contract type. Three common cases. ### Scenario 1, regular customer (PAYG or Enterprise Agreement) The customer is on Pay-As-You-Go or an Enterprise Agreement. Microsoft invoices at the start of the next billing cycle and the customer pays Net 30. | Step | When | What happens | | ---------------- | ----------------------------- | ------------------------------------------------------------------------------- | | Purchase | Month 1, e.g. 14 May | Customer accepts the offer. | | Invoice | Start of Month 2, e.g. 1 June | Microsoft issues the invoice at the start of the customer's billing cycle. | | Customer payment | Month 2, e.g. \~30 June | Customer pays Microsoft. | | Publisher payout | Month 3, \~15 July | Microsoft pays the publisher around the 15th of the month following collection. | End to end, roughly two months from purchase to payout. ### Scenario 2, fast track (MCA customer) Only applies when the customer is on a Microsoft Customer Agreement. Microsoft issues the invoice immediately on purchase, rather than waiting for the start of the next billing cycle. | Step | When | What happens | | -------------------- | ---------------------------------- | --------------------------------------------------------------------------------------------- | | Purchase and invoice | Day 1, e.g. 14 May | Customer accepts the offer, Microsoft issues the invoice the same day. | | Customer payment | Before end of month, e.g. \~28 May | If the customer pays within the same month, the transaction falls into the next payout cycle. | | Publisher payout | 15 June | Publisher receives payment on the 15th of the month following collection. | End to end, roughly one month from purchase to payout. Best case scenario, only available on MCA. ### Scenario 3, CSP customer (reseller in the middle) The end customer buys through a Cloud Solution Provider, who is the customer of record on the marketplace transaction. The CSP receives the invoice from Microsoft and has 60 days to pay. In parallel, the CSP invoices the end customer on its own terms. | Step | When | What happens | | ----------------------------- | ------------------------------- | ---------------------------------------------------------------------------- | | Purchase | Month 1, e.g. 12 February | End customer accepts the CSP private offer. Nothing else happens this month. | | Microsoft invoices the CSP | Month 2, e.g. early March | Microsoft issues the invoice to the CSP. The 60-day clock starts. | | CSP invoices the end customer | During the 60-day window | The CSP invoices the end customer separately, on its own commercial terms. | | CSP pays Microsoft | \~60 days later, e.g. early May | The CSP pays Microsoft at the end of the 60-day window. | | Publisher payout | 15 June | Microsoft pays the publisher on the 15th of the month following collection. | End to end, roughly four months. The extra month versus a direct EA or MCA deal comes from the CSP having 60-day payment terms with Microsoft, instead of the standard Net 30. ## How the publisher receives the money | Payment method | Typical receipt after Microsoft issues | | ------------------------ | -------------------------------------- | | ACH (US bank) | 2 to 5 business days | | SEPA (EU bank) | 2 to 5 business days | | Wire transfer | 1 to 3 business days | | PayPal (where supported) | 1 to 2 business days | Set the payout method in Partner Center, under Payout Profile. Microsoft converts the customer's local-currency invoice into the publisher's payout currency at a monthly exchange rate, documented in each payout report. Publishers always receive payment from Microsoft Corporation (US entity), regardless of where the customer is located. ## Edge cases ### What if the customer does not pay? In rare cases (bankruptcy, dispute, prolonged non-payment), Microsoft cannot collect. The transaction does not become eligible for publisher payout. The publisher absorbs the loss. Monitor the Revenue Dashboard for "Disputed" or "Past Due" statuses. ### What if the customer cancels or asks for a refund? Within the 72-hour SaaS cancellation window, a charge-back applies to the publisher's next payout. After 72 hours, the cancellation continues through the end of the current billing period, the customer pays for the full period, and the publisher receives the full payout. Microsoft-issued refunds outside the window result in a retroactive charge-back on the publisher's payout. ##