This article will help better explain why an ACH payment takes 7 - 10 business days to process from the date it is used to pay an Invoice,
The best place to start is how the process works from bank to bank.
Here are the steps the payment goes through:
- ACH is used to pay for an invoice and funds from customers bank are sent out to your bank.
- A 5 day window begins where the sending bank tells the receiving bank that the funds are good. ( sending bank can actually say "Yes they are good" then com back and say "No funds are no good" and pull it back with in that window.)
- Once the 5 business days have passed and funds are good, Stipe creates the payout to receiving bank.
- That payout then takes the normal 2 business days to process into your account. ( Please note: Not all banks are the same and there have been cases where it has taken the 10 full business days.)
When banks themselves offer a ACH process, they are willing to float the money so that this process happens in a shorter timeframe but the 5 day window still exists. If any bank does, they're trusting that both you and the customer are good for it and saying that they'll accept the risk in the event where the transfer is bad.
Stripe, our payment processor, has decided that this type of risk is not something they are willing to take on with all their customers. So they wait for the full 5 day window to close to create the pay out and send to your bank. We do nothing to slow this down, and will continue to work with Stripe to get the least amount of days possible.
Having trouble collecting from your customers? Check out these simple tips!