Bank debits allow you to pull funds directly from your client's bank account for one-time or recurring payments. They’re commonly used for recurring billing or larger transactions where lower fees are important.
Because bank debits can take several business days to confirm, they may not be ideal if you need to deliver services immediately.
⚠️ Bank Debits for Practice Better Payments is currently in an Early Access Program and is not yet available for all users.
The bank debits supported through Practice Better Payments include ACH Direct Debit (ACH), Pre-Authorized Debit (PAD), SEPA Direct Debit, Bacs Direct Debit (UK), BECS Direct Debit Australia, BECS Direct Debit New Zealand.
Review the parent article for an overview and links to each respective payment method article.
In this article:
- ACH Direct Debit Processing Fees
- Timing of Payouts (deposits)
- Storing ACH Direct Debit Payment Details
- ACH Direct Debit Mandates
- Mandate and Microdeposit Emails
- Instant Bank Verification and Microdeposit Verification
- Failed ACH Direct Debit Payments
- Disputed ACH Direct Debit Payments
- Mitigating ACH Direct Debit Disputes
- Refunding ACH Direct Debit Payments
- Disabling ACH Direct Debit Payments
- Re-enabling ACH Direct Debit Payments
ACH Direct Debit allows you to collect bank debits from your US clients for large or recurring charges to minimize payment failure rates and lower transaction costs (save up to 70% per transaction in costs compared to cards).
ACH stands for the Automated Clearing House, which is a nationwide network in the US that allows banks and other financial institutions to send batches of electronic payments to each other.
ACH Direct Debit Processing Fees
| Per Transaction Fee | 0.8% |
| Instant Bank Verification | $1.50 |
| Two-day settlements | 1.2% |
| Failed payment fee | $4.00 |
| Dispute fee | $15.00 |
⚠️ IMPORTANT NOTE: At this time, ACH transactions are limited to practitioners who have a USD-denominated Practice Better Payments account and who issue USD-denominated invoices only.
Timing of Payouts (deposits)
Standard payouts from ACH Direct Debit transactions will be deposited into your business bank account 4 business days from the initial transaction date.
Here’s a visual representation of how settlements work for ACH transactions:
| T+0 | T+1 | T+2 | T+3 | T+4 |
| Payment Initiated | Funds debited from client account |
Settlement (funds available) Payment confirmation |
T = Transaction date
+# = Business days since transaction date
💡 You can view all your payouts from the Payments & Disputes section of your Payments Dashboard in Practice Better or through the Stripe dashboard.
Storing ACH Direct Debit Payment Details
There are three ways to securely store your clients’ ACH Direct Debit details for future payments:
Method 1: Require billing information at booking:
- Edit Service > Advanced Options > Require billing information when clients book this service/package.
Method 2: Opt to save billing information for future payments on invoices:
- Invoice Editor > Payment Options > Save billing information for future payments.
Method 3: Ask your clients to enter their banking details in the Client Portal.
- Client Portal > Invoices & Billing > Billing Information.
ACH Direct Debit Mandates
Before you can take payments directly from a client’s bank account using ACH Direct Debit, you need their permission. This permission is called a mandate, and it explains the terms of the payment. Clients must review and agree to a mandate before you can process any ACH payments from their account.
When you process ACH Direct Debit payments through Practice Better Payments, your clients will automatically be shown the required mandate during checkout. This appears only the first time they add their bank account. Clients must review and accept the mandate before completing their payment using this method.
Your clients agree to the terms outlined in the End Customer Stripe Payments ACH Authorization, which explains their consent and authorization for ACH payments.
You can view a client’s mandate ID in your Stripe Dashboard:
- Go to Customers.
- Search for the client’s name.
- Select their bank payment method to view the associated mandate ID.
Mandate and Microdeposit Emails
To comply with Nacha* requirements, each client must receive a copy of their ACH Direct Debit mandate. If your client provides a billing email address, Stripe automatically sends them this information by email.
Microdeposit email instructions are received the same day the amount is received.
These emails include:
- A confirmation of the mandate, as required by Nacha.
- A notification about microdeposits, if Stripe needs to verify the client's bank account. This email includes a link to a secure, hosted verification page where your client can complete the verification process.
*Nacha stands for the National Automated Clearing House Association and is a non-profit organization that governs the Automated Clearing House (ACH) network.
Instant Bank Verification and Microdeposit Verification
When your clients opt to use ACH Direct Debit to make a payment, they are required to verify their bank account either by completing the Instant Bank Verification flow or a Microdeposit Verification to confirm account ownership. Completing this verification helps mitigate fraud risks by confirming that the person trying to pay you through the bank account is the authorized owner of that account.
When your client chooses to use Instant Bank Verification after adding their banking details, they will be prompted to (1) select their bank from a list, (2) log into their bank account through a secure interface, (3) select which account to use, (4) authorize the connection (verification completes immediately) and (5) agree to the ACH mandate, which authorizes the payments from their account.
When your client chooses to use Microdeposit Verification after adding their banking details, one or two small deposits ($0.01–$0.99) are sent to their bank account. These typically arrive within one business day and appear with the descriptor “ACCTVERIFY” (NACHA requirement).
Once the microdeposits arrive, your client should open the email they received when they first entered their bank details (see Mandate and Microdeposit Emails section above), click the verification link, and enter the deposit amounts on the hosted page. Your clients have 10 days to complete verification.
Example of verification page:
Failed ACH Direct Debit Payments
ACH Direct Debit payments can fail at any time after a payment is initiated, even after payment confirmation. Common reasons for a failure include:
- Insufficient funds in the client's bank account
- Invalid account number
- The client disabled debits from their bank account
If a payment fails after funds have already been added to your Stripe balance, Stripe will immediately remove the funds from your account.
In rare cases, Stripe may receive a failure notification from the bank after a payment has already succeeded. When this happens, Stripe automatically creates a dispute with one of the following reasons:
- insufficient_funds
- incorrect_account_details
- bank_cannot_process
Stripe also applies a failure fee in these situations.
Disputed ACH Direct Debit Payments
Your clients can dispute an ACH Direct Debit payment through their bank within 60 calendar days of the debit for personal accounts, or within 2 business days for business accounts.
Disputes submitted within these timeframes are final under ACH network rules. This means they can’t be contested or reversed by providing additional evidence, unlike credit card chargebacks. If a dispute occurs, you’ll need to contact your client directly to resolve the issue.
In rare instances, a payment can be successfully disputed outside the standard timelines. This is known as a late return. The late return process is handled by the banks involved in the transaction and is ultimately decided at their discretion.
When a dispute is created, the disputed amount and the associated dispute fee are automatically deducted from your Stripe balance.
⚠️ Important: If you issue a refund while the client's bank is also processing a dispute, your client may receive two credits for the same transaction — one from your refund and one from their bank. To avoid this, please review the Refunds section below before taking action.
When a client disputes an ACH Direct Debit payment, the dispute invalidates the mandate linked to that payment method. You’ll need to resolve the issue with your client and collect a new mandate authorization before attempting another charge.
If your client disputes another payment after that, Stripe will block their bank account from further use. For next steps, see Blocked bank accounts.
💡 You can monitor disputes in the Practice Better Payments Dashboard.
Mitigating ACH Direct Debit Disputes
If you accidentally charge your client, you can contact them right away to help avoid a potential dispute. Because ACH Direct Debit payments have longer settlement times and are processed differently by banks, there can sometimes be confusion between you, your client, their bank, and Stripe.
For example, your client might reach out to both you and their bank about the same payment. If you proactively issue a refund while their bank also initiates a dispute, your client could receive two credits for the same transaction — one from your refund and one from their bank.
To prevent this, make sure to communicate clearly with your client about refund timelines and status before taking action.
Refunding ACH Direct Debit Payments
You have up to 180 days from the date of the original payment to issue a refund for an ACH Direct Debit transaction. Refunds typically take at least three business days to process, and Stripe waits for the original payment to fully succeed before submitting the refund.
Stripe doesn’t explicitly label ACH Direct Debit refunds as “refunds” when returning funds to your client’s bank account. Instead, the refund appears as a credit that includes a reference to the statement descriptor from the original payment.
Disabling ACH Direct Debit Payments
If you do not wish to accept ACH Direct Debit transactions, you can disable this payment method by following these instructions:
- Log in to Practice Better.
- Click on your Settings (gear icon) and select Payments Dashboard.
- Click View in Stripe near the top-right.
- After successfully logging in to Stripe, click the Settings (gear icon).
- Select Payments from your Settings page.
- Go to the Payment methods tab.
- Locate the payment method (ie. Bank debit) in your list and click on it to expand the payment method panel.
- Click Turn off on the payment method you no longer want to accept.
Re-enabling ACH Direct Debit Payments
If you have disabled ACH Direct Debit Payments and need to re-enable this, follow steps 1-7 above, and click the button to Turn on your desired payment method.