Managing Failed ACH Payments in CentimePay

Summary: Learn how CentimePay handles failed ACH payments and how to manage them effectively.

TABLE OF CONTENTS

• What is a Failed Payment?
• Why Does a Failed Payment Happen?
• What Happens When There’s a Failed Payment?
• Resolving the Failed Payment 
• Replenishing Your Merchant Account

What is a Failed Payment?

A failed payment occurs when a bank or customer disputes a completed transaction, causing a reversal of funds to the customer’s account. This happens automatically when certain conditions aren't met.

As soon as Centime receives a notification from our merchant acquirer (the institution processing the payment), we’ll inform you and provide the necessary next steps.

Why Does a Failed Payment Happen?

Failed payments, also known as ACH returns or reversals, typically occur due to the following reasons:

• Insufficient Funds (NSF): The account doesn’t have enough balance to cover the transaction.

• Unauthorized Transaction: The account holder denies authorizing the debit or did not follow proper authorization.

• Incorrect Account Information: The routing or account number used is faulty or doesn’t exist.

• Payment Stop: The account holder has requested that the payment be stopped before processing.

• Duplicate Transaction: The exact payment is processed more than once.

• Closed Account: The account from which the attempted payment has been closed.

• Revoked Authorization: The account holder later withdrew A previously authorized transaction.

• Fraudulent Transaction: The bank or account holder flags the payment as fraudulent.

What Happens When There’s a Failed Payment?

Here’s how failed payments are handled:

1. Impact on Merchant Account:

   • Centime’s payment processor, Adyen, maintains your Merchant Account.

   • When a failed payment occurs, your Merchant Account will go negative by the failed payment amount.

2. Withholding Payments:

   • To maintain balance, Adyen will withhold subsequent payments until the negative balance is resolved.

   • Since Centime sends payments on a one-by-one basis, the withheld amount may exceed the negative balance.

3. Replenishing Your Merchant Account:

   • To restore your account, you need to pay directly to Adyen. 

   • Once the payment is received and processed, your balance will be restored, and withheld payments will be released.

Resolving the Failed Payment 

Invoices associated with failed payments must be recollected and Cetime's Merchant account must be made whole. 

1. Void the Payment in Your General Ledger: Once voided, Centime will return the invoice to the unpaid tab during the next sync.
2. Communicate with Your Customer: Inform your customer of the failed payment and request a new payment to resolve the issue. Centime will automatically resume reminders if applicable in the workflow.
3. Replenishing Your Merchant Account: To restore your account, you need to pay directly to Adyen.

Replenishing Your Merchant Account

You can resolve your Adyen Merchant Account in two ways:

1. Manual Resolution:

• Make a direct payment to Adyen, including a reference number (provided by Centime) to ensure correct application to your Merchant Account.

• Once processed, your account balance is restored, and Adyen will release any held payments.

2. Automated Resolution:

• During onboarding, we recommend enabling automatic debits to address future failed payments.

• Contact your bank and allow Adyen to initiate direct debits using the provided Originator IDs: 

  • 2638633811, 9263863381, 8263863381, 4263863381, 3263863381, 2263863380.

  • Centime initiates these debits as CCD transactions.  

• With this authorization, Centime will automatically debit your bank whenever a failed payment results in a negative balance, ensuring minimal disruptions.

By addressing failed ACH payments promptly and effectively, Centime helps you manage the situation with minimal impact on your business operations.