What is Direct Debit
- Accessing debit details
Currently, a settlement is generated only when merchants have a positive balance. A negative balance, resulting from customer refunds and disputes, are offset by additional loans furnished by Affirm.
What is Direct Debit
Direct Debit is how Affirm collects funds when a merchant accumulates a negative balance. Many times, this occurs when merchants issue refunds or close disputes and there hasn’t been enough captured transactions to cover those refunds.
With Direct Debit, Affirm can initiate the transfer of funds seamlessly to resolve the negative balance without requiring merchants to manually settle these balances through alternative methods like wire transfers or checks.
Note: Paying Affirm for balances owed is covered in our Terms Of Service. For larger balances owed, Affirm can work with you on alternative repayment arrangements.
Enabling Direct Debit
All merchants onboarded after 1/1/2021 have Direct Debit language included in their merchant agreements with Affirm. Direct Debit enablement will be a one-time action taken by Affirm for all merchants that onboarded prior to 1/1/2021.
Note: Merchants (onboarded before 1/1/2021) will be receiving a 30 day notice via email before Affirm automatically turns on Direct Debit. With this enabled, Affirm can settle negative balances automatically with merchants as needed.
What is the outcome of debit failure
There is no penalty for carrying a negative balance for an extended period, however, debit failures will result in outreach from Affirm, and unresolved negative balances can result in merchants entering our collections queue.
Accessing debit details
The following details of a debit can be found in the Merchant Portal:
- Sign in to your Merchant Portal
- On the left-hand sidebar, click Settlements
- Filter the date of interest and download the “detailed report”
- All ACH transactions (debits and credits) will have their own ‘deposit_id’
- Transaction level details are available in the detailed settlement report (e.g. what refunds caused the negative balance, which initiated the direct debit by Affirm)
To learn more settlement reports, please visit this article.