ACH Credit Transfer via Stripe

Introduction

Offline payment methods, mainly bank and wire transfers (also called push payments), are used by SMBs and enterprise businesses alike. When customers pay offline, the transaction details are often insufficient to update the due invoices:

• The payment amount may change due to foreign exchange rate conversion involved in multi-currency payments.
• Reference details or payment instructions may not reach you when you receive the payment.

This results in manual effort to reconcile payments with due invoices. With Stripe's ACH Credit Transfer feature, Chargebee updates payment due invoices (offline) accurately and removes the effort required to search and update due invoices.

What is the feature all about?

• Chargebee auto-generates a virtual bank account for each of your customers via Stripe.
• The virtual bank account details are mentioned in the invoice (payment instructions) sent to your customers.
• Customers can transfer the amount to this virtual bank account.
• Chargebee receives the payment info from Stripe and reconciles the invoices (unpaid invoices are marked as paid automatically).

Configure ACH Credit Payment Method

Follow these steps to set up and accept payments via Stripe ACH Credit Transfer:

1. Enable ACH Credit Transfer

You can enable the Stripe ACH Credit Transfer option in the Stripe Gateway settings page. Navigate to Settings > Configure Chargebee > Payment Gateways > select a Stripe Account or create a new Stripe Account > Enable ACH Credit Transfer.

2. Reconcile payments to invoices

Select how you'd like to apply the payment to customers' payment due invoices. You can either apply it automatically or manually. When a customer chooses to apply manually, they can select the invoices for which they want to apply the credits. Selecting Automatically applies the credits in the order of precedence (oldest to newest).

3. Set up webhooks in Stripe

You must configure webhooks in Stripe for Chargebee to receive payment notifications (when customers make payments). You can copy the webhooks URL from the gateway settings page and paste it in your Stripe account at Your account > Account settings > Webhooks > Add endpoint > Account.

Review payment instructions

Chargebee will automatically create a payment instruction to display the virtual bank account details in your invoices. You can review and edit them if required. Navigate to Settings > Configure Chargebee > Customize Invoice > Payment Instructions > ACH Credit and review the virtual bank account details.

Learn more about payment instructions here.

Virtual Bank Account

A virtual bank account is a unique account number generated so you don't need to share your sensitive bank account details with your users. A virtual bank account can be paid with ACH credit or wire transfer. Users can make payment of the amount due to this account, and the amount will be matched with the invoice.

• Stripe creates a virtual bank account (linked to your bank account) for each of your customers using your customer's email address.
• Customers will receive account details instead of your actual bank account details.
• Customers can transfer the payment to this virtual bank account.
• This eases the process of reconciliation in Chargebee.

Chargebee auto-generates virtual bank accounts in Stripe when a Payment Due, Posted, Not Paid invoice is created for a customer.

When customers are created, 'Email' and 'Country' attributes are mandatory. Email address is linked to the customer and used to create a virtual bank account. The country field is not mandated by Stripe, but Stripe has made this feature applicable for US customers, so Chargebee generates virtual bank accounts only if the customer is from the US.

Reconciling invoices and payments

1. A customer from the US makes a transaction in USD and gets a virtual bank account automatically created.
2. Once customers receive the invoices with virtual bank account details, they transfer the payment to this bank account.
3. Payment is processed and Chargebee receives the payment notification from Stripe (via webhooks).
4. Merchants can choose the invoice to which they wish to apply the payment. If they have selected manual mode in the settings, they can select the invoice and make the payment. If they have selected automatic, then Chargebee will apply the payments to all due invoices, starting with the oldest invoice.

Disable ACH Credit Payment Method

You can disable ACH Credit Transfer in the gateway settings page.

1. Go to the gateway settings page and disable the method.
2. Chargebee will remove the payment instructions automatically.
3. Once disabled, Chargebee won't add the virtual bank account details (already created for customers) in the invoices.
4. Chargebee will not create virtual bank accounts for new customers created subsequently.
5. If a customer still transfers a payment (or has already initiated a transfer), Chargebee will reconcile the invoice.

FAQ

1) How do I refund an ACH Credit transfer payment?

ACH Credit transfer payments cannot be refunded via Chargebee. You should process the refund via Stripe or manually. Read more about the process and implications here.

2) What happens if a customer transfers money even after the virtual bank account is disabled or deleted?

When you remove the ACH Credit transfer payment method, Chargebee will not show the payment instruction in subsequent invoices. If customers transfer the amount to that virtual bank account, Stripe will refund the amount to the customer.

3) What if the customer transfers an amount that does not match the invoice due amount?

If the amount is less, a partial payment will be recorded against the invoice. If the amount exceeds, the additional amount will be stored as excess payment for the customer.

4) What happens if an invoice is in dunning and the dunning attempt succeeds and the customer has transferred the amount as well?

The additional amount will be marked as excess payment at the customer level.

5) Can I create or retrieve a virtual bank account via API?

You can use Chargebee's virtual bank account API to manage the accounts.