// GLOSSARY -- PAYMENTS & FINTECH

What is Payment Splitter Contract?

1 min read Updated

A payment splitter is a smart contract that automatically distributes received payments among multiple recipients according to predefined shares — used for royalty distribution, team payments, and revenue sharing.

WHY IT MATTERS

Payment splitters automate multi-party revenue distribution. When the contract receives funds, it tracks shares and allows each recipient to withdraw their portion. OpenZeppelin's PaymentSplitter is the most widely-used implementation.

Applications include: NFT royalty splitting among collaborators, DAO revenue distribution, affiliate commission systems, and multi-party escrow arrangements.

The pull pattern (recipients withdraw) is preferred over push (auto-send on receipt) for gas efficiency and security — failed sends don't block other recipients.

FREQUENTLY ASKED QUESTIONS

Pull vs push payment splitting?
Pull: recipients withdraw their share when ready. Push: automatically sends on receipt. Pull is more gas-efficient and doesn't fail if one recipient's address is a contract that reverts.
Can shares be changed?
Depends on implementation. Immutable splitters are more trustworthy. Modifiable splitters need governance controls. Always check whether shares are fixed or admin-adjustable.
How are shares calculated?
As proportions of total shares. If Alice has 60 shares and Bob has 40 shares out of 100 total, Alice gets 60% and Bob gets 40% of every payment.

FURTHER READING

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