Before you start taking payments, it’s a good idea to familiarize yourself with a few important points about online payments.
Types of Payments
Your customers can pay by ACH, which can also be referred to as “eCheck,” or by credit card.
An ACH payment is a direct bank transfer.
There are two types of credit card payments. This is important to note because fees vary based on the type of card payment:
- Card present: In our case, a “card present” transaction occurs when the BBPOS scanner was used with the Inspect Point mobile app on the technician’s iPad/iPhone.
- “Keyed” / card not present:
- Typically, this occurs when a customer types in their credit card information into the checkout fields on an invoice.
- If a technician uses the iPad/iPhone camera functionality to automatically fill credit card fields, this is also considered a “keyed” transaction.
Processing Cycle & Timeline
Several steps occur once a payment is submitted. It is helpful to understand the payment “life cycle” and the various payment statuses.
When a card payment is made, the card details are immediately sent to the issuer for authorization. When the transaction is authorized, the payment status changes to “Approved.” If the issuer declines the authorization, the status changes to “Failed.”
Once a card transaction is approved, it will be included in your daily batch to be “captured” and then” settled.”
So, what does this mean?
At the end of the business day (at 7 PM ET, then 9:30 PM ET), all of your approved transactions are sent to the processing bank to be finalized so that the funds can be sent from the cardholder’s bank to the Payments portal.
When the first batch is submitted at 7 PM ET, all transactions processed between 9:31 PM ET the previous day through 7 PM ET on the current day will go from “Approved” to “Captured.” When the second batch is submitted, transactions processed between 7:01 PM ET - 9:30 ET PM on the current day will also go from “Approved” to “Captured.”
At approximately 10 PM ET each night, your transactions will move to the “Settled” status, and you will see the funds for the day available in your Payments portal.
An eCheck transaction takes 3-5 business days to process and is dependent on the customer’s bank (RDFI/issuing bank).
Unlike card payments, eCheck transactions are captured and settled on the day after they are approved. For example, if an eCheck payment is approved on Monday, it will capture and settle with Tuesday’s batch of transactions.
Furthermore, eCheck transactions differ from card payments as the “Settled” status does not mean that an eCheck was funded yet nor added to your available balance in the Payments portal.
If an eCheck payment fails due to insufficient funds, incorrect bank account information, etc., the transaction status will become “Returned.” Because an eCheck payment will capture and settle prior to the transaction being funded, it is possible for an eCheck status to change to "Returned" even after it was captured and settled.
The timeframe for an eCheck payment to be added to your balance varies depending on when it is processed and funded by the issuing bank. Generally, this occurs within 3-5 business days, and once funded by the issuing bank the eCheck income will be disbursed to your bank account as part of your next scheduled withdrawal.
Have questions, or need support? Contact us at firstname.lastname@example.org.