A method and system of a heterogeneous service provider model through pay-for-performance based transit settlements are disclosed. In one embodiment, a system includes a plurality of Point of Presence (POP) locations between a head office and a branch office in a heterogeneous computer network configured to communicate data through a pay-per-performance peering relationship between different entities of the heterogeneous computer network. In this embodiment, the system implements a debit-credit mechanism configured to handle payments as well as penalties associated with violation of a pair-wise mutual agreement between independent for-profit entities providing network services in a segment of the heterogeneous computer network.