Accepting ACH Direct Debit as a merchant

You accept ACH Direct Debit through a PSP that originates the debits for you. Stripe lists businesses in the EU countries, Norway, Switzerland and the United Kingdom among those that can accept it with settlement in local currency, for customers in the US paying in US dollars. Novalnet offers it as well and lists US dollars as both processing and settlement currency.

Three things differ from a card checkout. The customer has to authorise the debit terms, the bank account has to be verified, and where the merchant of record is outside the US, Stripe requires the account holder's complete address in the billing details. A European merchant does not need a US entity on that route, but it does need a checkout that collects those fields.

The customer side is the United States only: a US bank account, payment in US dollars. Stripe sets a minimum of 0.50 dollar per payment. For a European merchant that makes ACH Direct Debit a method for one market, offered next to cards to US customers, not a method to show in every checkout.

The order profile matters more than the country. ACH Direct Debit is reusable once the mandate is in place, which suits subscriptions, invoices and high-value orders where a card fee is large in euros. For a one-off 40 euro order to a first-time US customer, the verification step and the wait for confirmation weigh more than the fee saved.

Stripe states that a customer can generally dispute an ACH Direct Debit through their bank for up to 60 calendar days after a debit on a personal account, and up to two business days for a business account. Disputes within those windows are final and cannot be contested through the ACH network. The money has reached your balance long before the window closes.

That turns the window into an amount. On 2 million euro a year of ACH volume from personal accounts, 60 calendar days covers about 329,000 euro of settled payments that can still be returned at any moment. On the same volume from business accounts, two business days covers about 16,000 euro, taking 250 business days a year. The method behaves differently for a B2B seller and a consumer brand, and the difference is the size of the open position, not the fee.

Stripe processes an ACH refund as a separate credit to the customer's bank account, never as a reversal, within 180 days of the payment and in up to three business days. Its documentation lists full refunds as supported and partial refunds as not supported. A merchant that takes back one item from a three-item order needs another way to return part of the money.

There is a second operational risk. Stripe warns that a refund does not stop a dispute, so a customer who asks for money back and also contacts their bank can be credited twice, while the dispute fee is not refunded. Tell the customer when a refund is on its way, and reconcile refunds against open disputes before you pay out a second time.

What you pay for ACH Direct Debit is set in your agreement with your PSP, not by a scheme. Start by establishing whether you are overpaying your PSP, and where US customers carry a material share of your revenue, price the surcharges and the conversion before you renew.

Relevant markets: United States