ACH Payments

Overview

Vendasta offers a streamlined solution for billing clients through ACH direct debit payments facilitated by Stripe. This functionality allows you to seamlessly create invoices and facilitate payments using the Automated Clearing House (ACH) network.

Prerequisites for ACH Payments

Before leveraging ACH payments with Vendasta, ensure the following:

1. Vendasta Payments are set up.
2. Your business is based in the US, serving clients also located in the US.

Compliance and Mandates

Compliance with regulations, including those set forth by the National Automated Clearing House Association (NACHA) and federal legislation, mandates that an Authorization Agreement be established with clients before charging their bank accounts. Vendasta Payments, in partnership with Stripe, facilitates this process by presenting clients with an authorization agreement upon initiating ACH payments. This agreement grants permission for future automatic charges, but it's advisable to obtain explicit consent from clients before debiting their accounts.

Sample Agreement:

ACH Agreement:
Thank you for signing up for direct debits from <Partner>. You have authorized <Partner>, and, if applicable, its affiliated entities to debit the bank account specified above for any amount owed for charges arising from your use of <Partner’s> services and/or purchase of products from <Partner>, pursuant to <Partner’s> website and terms, until this authorization is revoked.

You have authorized <Partner>, and, if applicable, its affiliated entities to debit your bank account periodically if and when you use <Partner’s> services or purchase more than one of <Partner’s> products periodically pursuant to <Partner’s> terms. Payments that fall outside of the periodic debits authorized above will only be debited after your authorization is obtained.

You may amend or cancel this authorization at any time by providing notice to <Partner> with 30 (thirty) days' notice.

View these terms on Stripe.com

Fees Associated with ACH Payments

Transactions processed via ACH entail the following fees:

1. 1% of the invoice amount.
2. $1 Instant verification fee.
3. $4.00 per failed ACH direct debit payment.
4. $15.00 per disputed ACH direct debit payment.

Requesting ACH Payments in an Invoice

1. Create an invoice (one-time or recurring invoice) for a client account and select “Email the invoice to the customer to pay” under collection method. Under the payment options, select “Debit or Credit Cards” and or “ACH direct debit transfer”. You can select one or both options depending on how you would like your client to pay.
   • You can also automatically charge a payment method on file. Select Charge a payment method on file and select the desired payment method.
   • The get the client's payment method on file, first send them an invoice and ask them to pay and agree to an authorization mandate granting you permission for subsequent automatic charges. 

1. Send the invoice to your client to pay.

2. Depending on the options you’ve selected, your client will see one or multiple payment options. With ACH option, they will see "US bank Account". 

   1. Your client will be prompted to login and accept the mandate agreement which can give you authorization to auto-charge future invoices.

Requesting ACH Payments in Subscription Billing

1. Select the client account and go to Subscriptions > Billing Settings to enable subscription billing if you haven't already done so. Refer to this article on subscription billing.
2. Select the collection method “Email the invoice to the customer to pay” and under payment options, select “Debit or Credit Cards” and or “ACH direct debit transfer”. You can select one or both options depending on how you would like your client to pay.
   • You can also automatically charge a payment method on file. Under payment options, select Automatically charge payment method on file and choose the default payment method.

3. Save the changes.

4. All invoices generated from subscription billing will be set to the configured payment options by default.

5. The configured payment options will also be the default for new manual invoices you create on the account.

Collecting payment on an order

You can request payment from clients using ACH or Pre-Authorized Debits (PADs) before products are activated and wholesale charges are incurred. Clients will enter their payment information just as they would with an invoice. Products are automatically activated once the payment is successfully processed.

To set up this process:

1. Enable Subscription Billing:
   • Navigate to the client account.
   • Go to Subscriptions > Billing settings and enable subscription billing if it isn't already active. Refer to this article on subscription billing if needed.
2. Configure Payment Options:
   • Select "Email the invoice to the customer to pay" under the collection method.
   • Choose "Debit or Credit Cards" and/or "ACH direct debit transfer" under payment options, based on your preference for client payments.

1. Save Changes.
2. Order and Send Product:
   • Go to the Partner Center, order the desired product, and send it to the client for review and payment.

Clients will see the payment options configured in step 2 and can proceed accordingly.

ACH Workflow

ACH payments take up to 5 days to be processed and paid out into your account. Unlike card payments that are instant, ACH payments can be a little hard to track. It is therefore important to know the workflow for this type of payment.

Workflow:

• Send an invoice to your client to make payment using ACH.
• Your client would enter their bank account details and agree to the Authorization agreement that gives you a mandate for future payments.
• Payment is made.
  • If you choose the auto-charge option, a direct charge is made to the client's bank account. 
• When an ACH payment is made, a payment entry is created in pending status since the payment takes some time to be fully processed. Go to Billing>payments to see the payment entry.
• ACH payments may take up to 5 working days. When the funds are received, the payment is marked as successful, if they are not, it marks the payment as failed.
• The invoice status is also updated.

To learn in detail about how the workflow looks in Stripe, check out their ACH guide.

Please Note: The Vendasta name appears briefly in the SMB payment flow (see sample below). We are working with Stripe to remove any mention of Vendasta in the flow.

Disputes and Refunds
It should be noted that Vendasta has no contractual relationship with your clients and is not liable for any disputed transactions.

Disputes
To minimize disputes and chargebacks, always obtain explicit consent from your clients before debiting their cards or bank accounts. It should be noted that Vendasta

• Dispute Window:
  • Clients can dispute a payment through their bank up to 60 calendar days after a debit from a personal account, or up to 2 business days for a business account.
• Handling Disputes:
  • ACH Direct Debit disputes are final, with no process for appeal. If a dispute is successful, you must contact the customer directly to resolve the issue.
  • A successful dispute invalidates the associated mandate, preventing its reuse. To re-attempt a charge, resolve the dispute and obtain a new mandate authorization.
  • If a subsequent payment is disputed, Stripe blocks the bank account from further use.

Refer to Stripe support article here if needed.

Refunds

• Refund Window:
  • Refunds for ACH Direct Debit payments can be submitted up to 180 days from the original payment date.
  • Refunds take at least 3 business days to process.
• Early Refunds:
  • If you request a refund for a payment that hasn't completed yet (within a few hours of creating the Payment Intent), Stripe cancels the original payment by not submitting the charge to the bank, effectively voiding the transaction rather than processing a refund.
  • Refer to this article for how to issue a refund.