2009
Table Of Contents
- Contents
- Signing Up for Payflow ACH Payment Service
- About ACH Payments
- Summary of Authorization Requirements
- How Payflow ACH Payment Works
- ACH Payment Flow
- Timetable for a Typical ACH Payment
- Example of a Successful Business-to-Business Debit/Sale Payment
- Example of a Business-to-Business Sale/Debit Payment With a Customer Return Within Three Posting Days
- Example of a Business-to-Consumer Sale/Debit Payment With a Customer Return After Three Posting Days
- Example of a Successful Business-to-Consumer Credit Payment
- Example of a Business-to-Consumer Credit Payment With a Customer Side Return
- ACH Payment Types
- Retrying Returned Payments
- Notifications of Change
- Using PayPal Manager to Perform ACH Payments
- Using the Payflow Pro SDK to Perform ACH Payments
- Testing ACH Payments Using the Payflow SDK
- Responses to ACH Payment Requests
- Index
About ACH Payments
How Does ACH Work?
2
12 Payflow ACH Payment Service Guide
The following steps occur for an ACH payment:
Payflow ACH Payment performs the payment in two parts. In this example, a Debit/Sale
payment, the Payflow ACH Payment service first moves the money from your customer's
bank account and then moves the money to your bank account.
1. A customer visits the biller’s Web site. After customer authentication (user name and
password), the biller’s Web server presents the billing information.
2. The customer reviews the bill. When the customer schedules a payment, your website
collects the payment information and, using Payflow Pro, securely sends it to PayPal for
processing on the date specified by the customer.
3. PayPal prepares the ACH payment information and delivers it for ACH submission to the
originating depository financial institution (ODFI) by electronic transmission over a secure
connection. The ACH payments are submitted to the ODFI on the customer-specified
payment date.
4. The ODFI processes the ACH payment information and electronically delivers the
information to the ACH network operator (Federal Reserve). The ACH network operator
electronically distributes the ACH items to the customer’s bank (RDFI).
5. The Federal Reserve credits the ODFI’s bank account on settlement day for the value of all
ACH debits deposited, and debits the RDFI’s bank account for the value of ACH items
received.
6. PayPal then initiates a secondary transaction to move the money into your (biller’s) bank
account.
7. The customer’s periodic bank statements reflect ACH payments.
8. Merchants are notified of ACH payments on their bank statements. Merchants use PayPal
Manager to view status and reports on previously submitted payments.
9. If a customer debit results in a return for insufficient funds, closed bank account, or other
error condition, then PayPal debits your bank account for the amount of the return.
Merchants use PayPal Manager to view return detail information.
Differences from Credit Card Payments
Unlike the credit card network, the ACH network is unable to provide real time authorization
of funds. The Payflow ACH Payment service therefore responds initially to an ACH payment
by checking the format and other specific ACH information and returning an approved result.
The status of a payment changes during the lifecycle of the payment and occurs when PayPal
settles the payment with the ODFI and again if either a Return or a Notification of Change is
received.