ACH Direct Debit

There are two ways to accept US bank debits on Stripe: ACH Direct Debit and Instant Bank Payments. This guide describes ACH Direct Debit and helps you choose the best bank debit type for your business.

ACH lets you accept payments from customers with a US bank account. ACH Direct Debit is a reusable, delayed notification payment method. It can take up to 4 business days to receive acknowledgement of success or failure. Because ACH Direct Debit isn’t a guaranteed payment method, there’s a risk of failed payments and disputes.

Accepting bank accounts is slightly different from accepting cards:

1. Your customer must authorize the payment terms.
2. Bank accounts must be verified.

Payment flow

At checkout, the customer selects ACH Direct Debit.

The customer signs into their bank account to provide account information.

The merchant presents the mandate. The customer accepts it by completing the purchase.

The customer is notified when payment is complete.

Get started

If ACH is all you want, learn how to accept a payment with ACH. Below are options to skip writing that code.

Dynamic payment methods

You don’t have to integrate ACH Direct Debit and other payment methods individually. If you use our front-end products, Stripe automatically determines the most relevant payment methods to display. Go to the Stripe Dashboard and enable ACH Direct Debit. To get started with one of our hosted UIs, follow a quickstart:

• Checkout: Our prebuilt, hosted checkout page.
• Elements: Our drop-in UI components.

Other payment products

The following Stripe products also let you add ACH Direct Debit from the Dashboard:

• Invoicing
• Payment Links
• Subscriptions

Manually add each payment method

If you prefer to manually list payment methods or want to save ACH Direct Debit details for future payments, see the following guides:

• Manually configure ACH Direct Debit as a payment
• Save ACH Direct Debit details for future payments

Timing

With ACH Direct Debit, it can take time for funds to become available in your Stripe balance. The amount of time it takes for funds to become available is referred to as the settlement timing. The following tables describe the settlement timings for ACH Direct Debit payments that Stripe offers.

Initial payments made from select bank accounts that use temporary account numbers with Financial Connections might be subject to settlement delays.

A diagram showing the two settlement timings for ACH Direct Debit: standard (4 days) and faster (2 days).

For information on how to cancel payments, see Refund and cancel payments.

Transaction failures

ACH Direct Debit transactions can fail any time after the payment is initiated through payment confirmation. These failures can occur for a number of reasons, such as:

• Insufficient funds
• An invalid account number
• A customer disabling debits from their bank account

If a payment fails after funds have been made available in your Stripe balance, Stripe immediately removes funds from your Stripe account.

In rare situations, Stripe might receive an ACH failure from the bank after a PaymentIntent has transitioned to succeeded. If this happens, Stripe creates a dispute with a reason of:

• insufficient_funds
• incorrect_account_details
• bank_cannot_process

Stripe charges a failure fee in this situation.

Verification

Learn about validation and verification requirements.

Stripe lets your customers securely share their financial data by linking their financial accounts to your business. Use Financial Connections to access customer-permissioned financial data such as tokenized account and routing numbers, balance data, ownership details, and transaction data.

Your customers might enter their bank account manually instead of authenticating with Stripe Financial Connections. In these cases, Stripe provides a fully-hosted flow for collecting bank account details and verifies them with microdeposits.

When you use Stripe.js, our JavaScript library for building payment flows, Stripe provides a fully-hosted collection of bank account details, instant bank verification, and (if needed) delayed verification using microdeposits. This verification process is a requirement for many businesses, and it helps reduce payment failures and fraudulent activities.

Mandates

ACH Direct Debit rules require that you first get authorization from a customer to take payments before you can debit their bank account. To obtain authorization, you present a mandate to them. This mandate specifies the terms for one-time or recurring payments. The customer must agree to this mandate before you can collect any payments from their bank account.

When you use Stripe to initiate ACH transactions with your customers, make sure you have all the necessary authorizations and approvals from your customers for Stripe to transmit an ACH debit transaction to the customer’s bank account. The information you provide Stripe about each ACH transaction must be accurate and complete, including the name of your customer that authorized you to initiate the ACH transaction to their bank account.

Types of mandates

There are two types of mandates: online and offline.

• Online mandates: Appear as part of the payment flow on a website. Customers accept online mandates through a user interface element, such as clicking an Accept or Pay button, or by checking a box.

• Offline mandates: Require that you present the specific terms of the transaction to your customer in writing or over the phone. The customer accepts those terms when they sign the paper or verbally agree to the terms over the phone. See the details on the offline mandate types Stripe supports.

Stripe displays an online mandate on the payment page for you if you use one of the following hosted products:

• Checkout
• Payment Element
• Hosted Invoices Page

Mandates for online custom payment forms

For custom payment forms that directly integrate with the Payment Intents API, you must display the mandate terms on your payment page before confirming the PaymentIntent or SetupIntent.

You only need to display a mandate the first time you collect a customer’s bank account.

Recommended mandate text (online)

We recommend that you use the following mandate text for your online custom payment form. This text must include the customer’s name, bank account information, and the date.

For details on displaying the correct business name for Connect users, see merchant of record and statement descriptors.

If you plan to use the customer’s bank account for future payments with the setup_future_usage parameter or by saving bank details for a future payment, also include:

Mandate and microdeposit emails

To comply with Nacha rules, you must provide each customer with an electronic or hard copy of the mandate. By default, if your customer provides a billing email address, Stripe automatically emails your customer the following information:

• Confirmation of the mandate, per Nacha requirements.
• Notification if Stripe needs to use microdeposits to verify your customer’s bank account. These notification emails link to a hosted verification page.

Sending custom mandate notifications (online)

You can send custom mandate notifications to customers.

To send custom mandate notifications:

1. Turn off Stripe emails in the Stripe Dashboard email settings
2. Send a mandate confirmation email when you receive your customer’s bank account and mandate authorization.

In the email, include the following information:

• Authorization date
• Account holder name
• Financial institution
• Routing number
• Last four digits of the account number

The following is a sample mandate confirmation email that you can send.

If you collected the customer’s bank account for future payments with the setup_future_usage parameter or by saving bank details, also include:

Disputes

ACH Direct Debit provides a dispute process for bank account holders to dispute payments. Customers can generally dispute a payment through their bank for up to 60 calendar days after a debit on a personal account, or up to 2 business days for a business account. Disputes received within these timeframes are considered final and uncontestable through the ACH network. Consequently, you can’t challenge these disputes and must resolve them directly with your customers. In rare instances, a debit payment can be successfully disputed outside these timelines. This is called a late return. The late return process is primarily managed by and ultimately decided at the discretion of the banks involved in the transaction.

When a dispute is created, Stripe sends both the charge.dispute.created and charge.dispute.closed webhook events and deducts the amount of the dispute and associated dispute fee from your Stripe balance.

Unlike credit card disputes, all ACH Direct Debit disputes are final with no process for appeal. If a customer successfully disputes a payment, you must contact them directly to resolve the situation. If you suspect that disputes are fraudulent, Stripe Radar might help you reduce risk.

Resolving disputes

When a customer disputes an ACH Direct Debit payment, it invalidates the mandate associated with the payment method and you can’t reuse it. To attempt a charge again, you must resolve the dispute with the customer and collect a new mandate authorization.

If they dispute a subsequent payment, Stripe blocks the bank account from further re-use. To learn more about resolution steps, see Blocked bank accounts.

Requests for Proof of Authorization

In some rare circumstances, a customer’s bank initiates an inquiry to request proof of authorization for an ACH Debit. If you use custom mandates through the Payment Intents API, Stripe creates a dispute inquiry for your business to provide evidence for the payment in question. If you use Stripe-hosted ACH mandates, Stripe automatically responds to the customer’s bank with a copy of the debit authorization.

When Stripe receives an ACH Debit authorization inquiry, a charge.dispute.created event is triggered with the status warning_needs_response and a new dispute inquiry is shown in the Dashboard. To comply with Nacha rules, you must upload evidence of the customer’s authorization upon request.

Evidence to submit for an ACH inquiry

Here is the evidence you need to submit for an ACH inquiry:

• Mandate authorization (required): A copy of the authorization proving that the customer or bank account holder agreed to the debit on their bank account.
• Sales receipt: Documentation of the goods or services purchased by the customer.
• Customer information: Information on the customer’s identity proving that the accountholder authorized the payment and received the good or service.

You can upload evidence through the Stripe Dashboard or the Files API. You can only submit evidence for a dispute inquiry once. If you don’t submit evidence before the deadline, the dispute is accepted and closed.

Submit evidence through the Dashboard

To submit evidence to contest a late return dispute through the Dashboard:

1. Go to the payments page and look for a payment with an inquiry icon.
2. Click on Respond to the inquiry to provide more details about the transaction. You can upload an image or PDF of the proof of authorization.

Submit evidence through the Files API

To submit evidence through the Files API, first upload the evidence files.

curl https://files.stripe.com/v1/files \
  -u 
sk_test_BQokikJOvBiI2HlWgH4olfQ2
: \
  -F "file"="@/path/to/a/file.jpg" \
  -F "purpose"="dispute_evidence"

Then, link the uploaded files to the dispute inquiry in the Disputes API using the returned file id.

curl https://api.stripe.com/v1/disputes/YOUR_DISPUTE_ID \
  -u "
sk_test_BQokikJOvBiI2HlWgH4olfQ2
:" \
  -d "evidence[uncategorized_file]"=file_id_123 \
  -d submit=true

You can provide additional information about the transaction using other fields in the Disputes API.

Post-submission

After receiving evidence submissions, Stripe sends a charge.dispute.updated event and a message appears in your timeline confirming receipt of the evidence. After you submit evidence, the bank reviews the evidence and makes a determination. If the evidence is sufficient, the dispute inquiry closes in your favor and is marked as won. If the bank determines that the authorization is insufficient, the dispute closes and is marked as lost. Stripe doesn’t determine whether or not evidence of authorization is sufficient, and under Nacha rules, the bank may return the payment in its sole discretion.

Blocked bank accounts

To comply with Nacha regulations, Stripe may block bank accounts when a blockable ACH return is received until we can confirm that the issue causing the returns has been resolved. When this happens, Stripe sends the payment_method.automatically_updated event for all saved payment methods.

Consuming these events can provide advance notice if your business model relies on recurring payments that need to be processed before a certain date. Inspect the event data for the us_bank_account.status_details.blocked field, then work with your customer to unblock or switch bank accounts before initiating future payments.

You receive equivalent events when the block is removed, indicating that payment methods can be reused immediately if an active mandate exists or you re-collect one.

For more information on blocked bank accounts and how to deal with them, see Blocked bank accounts.

Refunds

You have a maximum of 180 days from the date of the original payment to submit a refund for an ACH Direct Debit payment. Refunds require at least 3 business days to process. Stripe waits for the original payment to succeed before submitting the refund.

Stripe doesn’t explicitly label ACH Direct Debit refunds as refunds when we deposit the funds back to a customer’s bank account. Instead, we process refunds as a credit and include a reference to the statement descriptor for the original payment.

Statement descriptors for ACH

Every ACH Direct Debit payment shows up on customers’ bank statements with the name of the merchant. For payments created with Stripe, the name of the merchant is your Stripe account’s statement descriptor. You can override this default behavior for every transaction independently by using a dynamic statement descriptor. To do so, specify the statement_descriptor parameter when creating the PaymentIntent.

The table below illustrates the merchant name behavior you can expect on the customer’s bank statement:

Each bank formats these fields differently. Depending on your customer’s bank, some fields might appear in all lowercase or all uppercase.

Connect

If you use Connect, you must take the following into consideration before you enable and use ACH Direct Debits.

Request ACH Debit capabilities for your connected accounts

Set the us_bank_account_ach_payments capability to active on your platform account, and for any connected accounts you want to enable for ACH debits. You can also request more account capabilities.

Merchant of record and statement descriptors

The charge type of Connect payments might change the default statement descriptor and the merchant name that appears on the customer’s bank statement. The charge type can also change:

• The merchant of record shown on the mandate
• The merchant shown on confirmation emails
• The merchant shown on microdeposit reminder emails

The merchant of record determines the Stripe account authorized to create payments with a particular PaymentMethod. To learn more about sharing this authorization across multiple connected accounts, see PaymentMethod and Mandate cloning.

PaymentMethod and mandate cloning

You can collect customer bank accounts on the platform account and clone ACH Direct Debit payment methods. Cloning these methods allows you to save customer bank accounts for later use on connected accounts. When you clone ACH Direct Debit payment methods, Stripe duplicates the mandate authorization to the connected account, but we don’t send any new mandate confirmation emails.

When collecting a bank account that you intend to clone to connected accounts, you must communicate to the customer that their authorization extends to connected accounts on your platform. For example, you can communicate this message to a customer through the mandate terms. Failure to communicate this message to your customers could result in customer confusion and increase the risk of disputed payments.

Connect and settlement

Settlement speed is generally controlled at the platform level. The table below shows a comprehensive view of settlement timing by account and charge type.

Testing ACH

Learn how to test scenarios with instant verifications using Financial Connections.

Send transaction emails in a sandbox

After you collect the bank account details and accept a mandate, send the mandate confirmation and microdeposit verification emails in a sandbox.

If your domain is {domain} and your username is {username}, use the following email format to send test transaction emails: {username}+test_email@{domain}.

For example, if your domain is example.com and your username is info, use the format info+test_email@example.com for testing ACH Direct Debit payments. This format ensures that emails route correctly. If you don’t include the +test_email suffix, we won’t send the email.

Test account numbers

Stripe provides several test account numbers and corresponding tokens you can use to make sure your integration for manually-entered bank accounts is ready for production.

Before test transactions can complete, you need to verify all test accounts that automatically succeed or fail the payment. To do so, use the test microdeposit amounts or descriptor codes below.

Test microdeposit amounts and descriptor codes

To mimic different scenarios, use these microdeposit amounts or 0.01 descriptor code values.

Test settlement behavior

Test transactions settle instantly and are added to your available test balance. This behavior differs from livemode, where transactions can take multiple days to settle in your available balance.

US bank debit comparison

Fraud Protection for ACH with Radar

Stripe Radar provides fraud protection capabilities for ACH Direct Debits without any additional development time, performing real-time evaluation using machine learning algorithms to help identify and block high-risk transactions. Our machine learning trains specifically for ACH, so it’s effective at detecting fraud that might be unique to ACH Direct Debit payments.

For Radar users, Radar might be on by default for all supported payment methods.

Billing Retries

Enable Direct Debit retries to have Stripe automatically retry failed Direct Debit payments caused by insufficient funds. You can turn on retries for recurring subscription invoices, one-off invoices, or both.

Stripe can automatically retry each failed ACH Direct Debit payment a maximum of 2 times, no more than 40 days after the original payment attempt.