Key features
- Cost-effective transactions: Improve your bottom line through lower processing fees as compared to credit cards and other payment methods.
- Bank-level authentication and account verification: Minimize fraud risk through PayPal’s instant verification process that protects you from fraudulent transactions.
- Vault capability (for later purchase): Save bank account details to offer a faster and more convenient payment experience.
- No credit requirements: Expand your customer base by accepting payments directly from bank accounts without credit requirements.
How it works
- Merchant: Presents Pay with Bank - ACH as a payment method on their website along with a payment authorization text.
- Buyer: Selects Pay with Bank - ACH as the payment method at checkout.
- Merchant | Partner: Places a request to create an order.
- PayPal: Creates an order and returns the order ID.
- Merchant | Partner (through JavaScript SDK or API): Confirms the payment source as Bank - ACH Direct Debit.
- PayPal: Initiates the account verification process. Sends an authentication (account linking) URL to Merchant, Partner, or JavaScript SDK.
- Merchant | Partner | JavaScript SDK: Renders the URL.
- Buyer: Links the bank account and authenticates payment.
- Merchant | Partner: Places a request to capture payment.
- PayPal: Captures the payment and notifies the merchant or partner through webhooks.
- Merchant: Notifies buyer.
Eligibility
- Account type – PayPal Business account: You must have an account approved for Expanded Checkout to add ACH Direct Debit as a payment method. When you sign up for a PayPal business account with PayPal Expanded Checkout as your product and complete all onboarding steps, PayPal reviews and approves the account creation request.
- Available country: ACH Direct Debit integration is available only for merchants or partners in the US.
- Available currency: US dollars ($).
- Compliance requirements: NACHA is the ACH network’s governing body. Ensure to comply with all NACHA operating rules and regulations.
Account provisioning
- Merchants
- Partners
Contact your PayPal account manager to enable ACH payments for your account.
Important information
Ensure to review the following information before you add ACH Direct Debit as a payment method.Minimum limit for transactions
ACH Direct Debit cannot process payments lower than $1.Liabilities
If an ACH Direct Debit transaction fails at the buyer’s bank or is disputed, you are liable for the transaction amount PayPal might have moved to your account. PayPal also charges a return fee in such cases. The return fee is communicated as part of your account setup during onboarding. A transaction can fail as an unauthorized transaction or due to other reasons. Review the following information to understand the charges involved:- Other reasons
After money moves out of their bank account, buyers can dispute transactions as unauthorized within 60 days for personal accounts and 2 days for business accounts. When a transaction is returned as unauthorized, PayPal charges your account for:
- The original transaction amount.
- A $5 dispute fee.
Risk management best practices
To prevent fraud or double-crediting money into the buyer’s account:- Delay refunds: Don’t issue a refund until the funds settle in your account. It is possible that you issue refunds but the transaction fails at the buyer’s bank.
- Communicate with buyers: If you are processing refunds, communicate to your buyer that you have started the refund process and it will take at least 5 calendar days for them to receive the funds back in their bank account.
- Delay fulfillment: ACH Direct Debit settlements take up to 5 calendar days after fund clearance. Ship your product or service after the money is settled to your account. Communicate the fulfillment timelines to the buyer.