Payout Merchants

At this point, you have successfully created a Merchant account, and processed a payment between a payer and said merchant. All that remains is to pay the Merchant out, and you’ll have completed the “happy path” of the payment lifecycle using the API.

In terms of relationships, a Payout Method has a child relationship to an Account. An account can have multiple payout methods (one for each currency). In addition the Legal Entity acts as a ‘grandparent’ to the Payout Method object.

Once you are done with this section, you’ll be able to think about the payout flow for your merchants, and offer them the flexibility of choosing their payout schedule and specifying their banking details.

How Payouts Work

Payouts, at a high level, consist of a few pieces: payment processing and settlement, reserves, and receiving payouts. Throughout the guide, we’ve covered payment processing and settlement, and we’re ready to discuss reserves and payouts.

Once payments are processed from payer to merchant, they are placed into a merchant’s account, and subject to reserves. From there, a merchant can receive payouts, at a frequency of daily, weekly, or monthly. Reserves are a necessary step to ensure protection from fraudulent merchants.

Reserves

Before a merchant receives payment, a merchant’s funds will be subject to WePay’s reserve policies. A reserve is defined as a threshold on a merchant’s account, reviewed by WePay Risk, with any money above the reserve released after 7 days.

Every merchant can have their own threshold, but the default is $500 per week, which means, at most, a merchant can receive $500 per week. Any amount over this threshold will be available 7 days after first being received.

Example 1  

Let’s say a merchant receives 3 payments of $250 each. The first two payments worth is available for withdrawal (and, if they have a Chase account, potentially settle the same day), but the 3rd payment will not be available until one week after the 3rd payment was made, regardless of payout frequency settings. The same applies for consequent payments after the 3rd.

Example 2  

Let’s say a merchant receives 3 payments on Monday: $501, $100, and $250. Because payments are not split, the first payment will place the Merchant’s account above the $500/week ceiling. As a result, $501 will be available for payouts the following Monday (7 days).

Please contact either your account manager or the WePay support team at support@wepay.com to modify the default $500 per week reserve for merchants. Once your Merchant has available funds (total funds under reserve amount), they can receive payouts. The next section describes when they will actually receive money.

Payouts

WePay offers automatic Same-Day Deposit capabilities for merchants on your Platform. If a merchant adds a Chase Bank Account where funds are to be deposited, they will receive their cash same day for all payments approved (completed API state) by the cutoff time Sunday-Friday. Plus, Saturday transactions will be deposited Sunday morning.

For a non-Chase Bank Account, deposits will occur on the next business day, depending on the receiving bank. Essentially, we are reducing the existing ACH payout window to 1-3 business days (from the historical 2-5).

There is no additional cost for this functionality.

For exact time frames and cutoff times, please reference this table:

Same-Day Deposit requirements:

• Depending on your platform’s vertical (crowdfunding or SMB), your merchants will be setup will be set up with either a 5 pm PT or a 12 am PT cut-off time for transactions, based on the chart above. Reach out to your integration team, relationship executive, technical account manager, or api@wepay.com to find out more.
• The merchant must be based in the United States.

Same-Day Deposit limitations:

• Same-Day Deposits are currently rolling out. Rollout will be complete by the end of Q4 2019.
• ACH payments have a built-in delay of 2 business days. Once an ACH checkout is in a completed API state, it will be eligible for Same-Day Deposit.
• Saturday Deposits will be available on Sunday morning.
• Funds deposited to non-Chase bank accounts may post as soon as the next business day, depending on the receiving bank
• All transactions are subject to WePay terms of service and exclusions therein, including risk assessment and fraud monitoring, which may result in delays.

Create a Payout Method

Now that you understand payout merchants, let’s walk through how to build it. Be sure to grab your Legal Entity ID and Account ID from the Onboard Merchants section. Like the previous two articles, we recommend using the Tokenization strategy for collecting sensitive information, like a Merchant’s payment bank information.

First, we’ll need to make sure that the Merchant’s Legal Entity and Account have all necessary information to enable Payouts. As a reminder, we had to add extra information to begin processing payments; similar information is required to send payouts. Start by doing the following:

GET /legal_entities/{id}/verifications

You’ll notice what information is missing before the Legal Entity can enable payouts. In order to fully unlock payouts, the following information needs to be provided.  

Once that is completed, send the equivalent call for Accounts:

GET /accounts/{id}/capabilities

If you successfully added in the missing Legal Entity information, you’ll see the payouts section enabled to true in the Accounts response. If you don’t, use the response to fill in information to update the Legal Entity and Account.

Let’s now collect Payout Information for Merchants. We’ll start with the front end, where a Merchant will enter their payout bank information. You’ll want to create fields that capture the information below, using the Tokenization JS library:

WePay.tokens.create({
"resource": "payout_methods",
"payout_methods": {
  		"type": "payout_bank_us",
    		"payout_bank_us": {
    			"account_number": "12345678",
"routing_number": "021000021",
			"account_type": "checking"
}
  	}
}, {}, function(response) {
  console.log(response);
});

This will return a token. Using the token, send a POST, similar to the one below.

POST /payout_methods
{
	"legal_entity_id": "YOUR-LEGAL-ENTITY-ID-HERE",
	"nickname": "Test Payout Account",
	"token": {
		"id": "payout_methods-88ae04ca-0983-468b-9ca6-2ce18b66dafb"
	}
}

At this point, we’ve established a Payout Method, which is linked to a Legal Entity. Keep reference to the Payout Method ID, as we’ll connect it back to an Account, and attach a Payout schedule.

If you’d like to see how to create a Payout Method without Tokenization, read the below section. Otherwise, skip to Attach a Payout Method to a Merchant Account.

Attach a Payout Method to a Merchant Account

With a Payout Method ID handy, it’s time to connect an Account. First, determine what periods you will offer to your Merchants. We currently support daily, weekly, and monthly payout schedules. After that, send a POST to the accounts endpoint, similar to what we have below.

POST /accounts/{id}

{
  "payout": {
    "currencies": {
      "USD": {
        "payout_method_id": "YOUR-PAYOUT-METHOD-ID",
        "period": "daily"
      }
    }
  }
}

In case the account accepts multiple currencies, you will need to create multiple payout methods for each currency.

Remove a Payout Method from a Merchant Account

If a Payout Method ever needs to be removed from an Account (i.e. if the merchant submitted incorrect banking info but hasn’t located the correct info yet), it’s possible to remove with a POST to /accounts{id} like this:

{
  "payout": {
    "currencies": {
      "USD": null
    }
  }
}

Set Notifications for Payouts

Notifications are WePay’s way of communicating important status information with your platform in real time. The list below shows use cases where you must send communication to your merchants, once you receive a notification from WePay.

Required Communication

• Notify merchants of an invalidated Payout Method.
• Notify the merchant that a Payout failed.

Please visit the Platform Setup article to determine the actions to take for the given Required Communication and topic.

Now that you’ve gotten end to end money movement down from Payer to Merchant, it’s time to discuss handling payment operations. Questions? Need help? Visit our support page!