ACH Payments

What are ACH Payments?

ACH stands for automated clearing house. It is a method of moving money between bank accounts through electronic transfer. ACH is also called e-check because it sort of works like an electronic check. ACH payments have lower processing fees than cards, but they also have some risks you should know about. So keep reading!

Why Do ACH Payments Have a Processing Status?

The Processing Status for ACH payments is necessary to avoid confusion about whether an order has been paid for. This protects shop owners from payment issues and returned payments.

For payments made by card, the card information is instantly verified and the payment is immediately accepted or declined. But ACH does not work instantly.

ACH works more similarly to a check. When an ACH payment is made, it is like depositing a check. The bank needs time to verify the details and ensure the person paying has the money in their account. This time period is represented by the processing status. Some banks will process ACH payments in 1-2 business days, but other banks may take a week or more. Just like a check, you bank may credit the money to your account while the payment is still processing, but if the payment bounces, the money will then be taken out of your account.

For this reason, even if you have received the money from the transaction, you should still pay attention to the payment status on DecoGro. Once the ACH payment has finished processing successfully, the payment status will change to Paid.

Please note, even after an ACH payment has been processed successfully, your customer can still dispute the charge, just like a card payment.

There are a lot of scams surrounding both card and ACH payments, so it is important to verify the success of your transactions before performing any work.

Can I Refund an ACH Payment?

Yes, you can refund an ACH payment, but only after it has finished processing. This is for your protection.

Watch out for this scam

There is a common scam in the apparel industry where the scammer makes a payment via ACH, then asks for a full or partial refund. After you send them a refund, their original ACH payment fails and the money is taken out of your account. Many smart people have been fooled by this — only refund ACH payments that have finished processing.

What Happens If an ACH Payment Fails or is Returned?

If an ACH Payment fails or is returned, the payment status will go back to Not Paid. You will also receive a notification via email. If you don’t want to receive this email notification, you can turn it off in your profile settings.

If there was a failed payment, don’t panic yet. It could have been a typo or other mistake from your customer. Reach out to them first before jumping to any conclusions.