Reconcile platform payment activity with merchant bank statements

ACHQ Settlement API

Settlements are a central component to payment processing. A Settlement refers to the transfer of funds into or out of a Merchant’s bank account in direct response to certain events that affect the status of payments originated by the merchant.

The purpose of this document is to introduce you to the fundamental concepts of settlements as they relate to merchant accounts and to provide detail about the functionalities and information available to you through this Settlement Reporting API.

The Settlement API allows your platform to:

With full visibility into the external bank transfer activity, your end users never have to juggle various applications to get a full handle on their revenue and reconciliation. Your platform becomes the center of their financial picture.

Settlement types

The specific nature and purpose of an ACH settlement can vary based on several factors, including the underlying payment transactions, banking regulations, and the settlement hold time policies on a merchant account. The following is a list of the different types of ACH settlements you can expect to see:

Settlement TypeDescriptionTransfer Type
Settlement for ACH DebitsWhen you debit a batch of customer bank accounts on a given banking business day and the statuses of those payments change from In-Process to Cleared, the total of those Cleared payments is credited to the merchant’s bank account.Credit
Offset for ACH CreditsWhen you create ACH payouts like payroll, vendor payments or refunds on a given banking business day, the total amount required for these outbound payments is withdrawn from the merchant’s bank account and the funds are then sent through the Federal Reserve to the destination bank accounts.Debit
Charge Back for Late Disputes/ReturnsWhen an ACH debit that has already settled into the merchant’s bank account is Returned by the customer’s bank due to a dispute or some other valid reason, the funds must be ‘charged back’ and returned to the customer’ bank by NACHA regulation. The aggregated total for all such Charge Backs received on a given banking business day are debited from the merchant’s bank account.Debit
Offset ReturnWhen an ACH payout to an employee, a vendor or a customer (refund) fails because the bank account does not exist or cannot be credited, the offset funds that were debited from the merchant’s bank account to fund this payout are credited back to the merchant’s bank account.Credit

Transfer Types

It's important to properly display the direction of money movement to your end users.

Transfer TypeACH Payment TypeResults
DebitACH Debit (Charge)ACHQ withdraws funds from a merchant's account
CreditACH Credit (Payout)ACHQ deposits funds in a merchant account


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