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Pre-requisite

• Set up your sandbox enterprise account
• This feature is only available on v2022-09-21 of Momentum

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Important Note

You must be configured for this use case prior to use or your transfer request will result in an error. Reach out to your Orum representative for more details.

Overview

Pay by Bank offers a convenient way to enable persons to pay businesses for goods or services using a bank account. This option can be used as an alternative to credit or debit card payments and is preferred by some persons and businesses because it allows them to transact without incurring additional fees or charges that cards tend to possess. Some examples of when you may use a pay by bank transfer:

• Ecommerce platforms: enabling a new payment method on your ecommerce platform so customers can choose to pay merchants with their bank account
• Marketplace: enabling a new payment method on your marketplace so customers can choose to pay sellers with their bank account
• Donations: enabling the ability for individuals to make charitable donations using their bank account

Transfer request requirements

Persons in the created state are only eligible to be the source in a pay by bank transfer OR the destination in a pay by bank return.

Key Steps

For the following key steps in this guide, we’ll assume you are building an ecommerce platform that enables consumers to pay merchants for goods and services with their bank accounts, and your customer, the Merchant, is an online sneaker company.

• Ecommerce Platform enables merchants to sell their products on an online storefront
• Sneaker Company sells sneakers to consumers via their website (business)
• Consumer wants to purchase sneakers (person)

1. Authenticate to Momentum

Use the /authenticate and /refresh endpoints.

2. Create a consumer and their associated bank account

Use the POST /persons endpoint to create the consumer and the POST /external/accounts endpoint to create the consumer’s bank account. The external account can be created as soon as the consumer is created.

To collect payment from consumers only a first and last name are required during creation. Additionally, pay by bank transfers do not require KYC verification or continuous watchlist monitoring. This means that the consumer’s status will remain in the created state.

{
     "customer_reference_id": "consumer_1",
     "first_name": "Francis",
     "last_name": "Smith"
}

{
     "account_reference_id": "consumer_account_1",
     "customer_reference_id": "consumer_1",
     "customer_resource_type": "person",
     "account_type": "checking",
     "account_number": "987654321",
     "routing_number": "900000009",
     "account_holder_name": "Francis Smith"
}

3. Create the Sneaker Company and its associated bank account

Use the POST /business endpoint to create the Sneaker Company and the POST /external/accounts endpoint to create its external account. The external account can be created as soon as the Sneaker Company is created.

Before sending a transfer request, the Sneaker Company must complete KYB verification and continuous watchlist registration.

{
     "customer_reference_id": "sneaker_company_1",
     "legal_name": "Sneaker Company",
     "tax_id": "123456789",
     "tax_id_type": "tin",
     "addresses": [
          {
               "type": "legal",
               "country": "US",
               "address1": "100 Sneaker Lane",
               "city": "Sneakerville",
               "state": "NY",
               "zip5": "10001"
          }
     ]
}

{
     "account_reference_id": "sneaker_company_account_1",
     "customer_reference_id": "sneaker_company_1",
     "customer_resource_type": "business",
     "account_type": "checking",
     "account_number": "123456789",
     "routing_number": "100000001",
     "account_holder_name": "Sneaker Company Owner"
}

4. Send a Pay by Bank transfer

Use the POST /transfers endpoint to create the transfer. When initiating a pay by bank transfer for the purpose of a consumer purchase, ensure the consumer from step 2 is in the source object and the Sneaker Company from step 3 is in the destination object.

• The consumer only needs to be in a created state
• The Sneaker Company needs to be in a verified state
• The source and destination bank accounts must be in a verified state

{
     "currency": "USD",
     "source": {
          "account_reference_id": "consumer_account_1",
          "customer_reference_id": "consumer_1"
     },
     "destination": {
          "account_reference_id": "sneaker_company_account_1",
          "customer_reference_id": "sneaker_company_1"
     },
     "transfer_reference_id": "transfer_1",
     "amount": 35000,
     "speed": "asap"
}

5. Send a Pay by Bank refund

In the event Francis Smith returns their sneaker purchase, you can issue a refund using the same POST /transfers endpoint. Switch the source and destination inputs so that the Sneaker Company from step 3 is in the source object and the Francis Smith from step 2 is in the destination object.

• The consumer only needs to be in a created state
• The Sneaker Company needs to be in a verified state
• The source and destination bank accounts must be in a verified state

{
     "currency": "USD",
     "source": {
          "account_reference_id": "sneaker_company_account_1",
          "customer_reference_id": "sneaker_company_1"
     },
     "destination": {
          "account_reference_id": "consumer_account_1",
          "customer_reference_id": "consumer_1"
     },
     "transfer_reference_id": "transfer_2",
     "amount": 35000,
     "speed": "asap"
}

Troubleshooting common errors

Customer status

Customer status errors can occur when the customer's status in either the source or destination is invalid. For pay by bank transactions, only one party can be in the "created" state, which can lead to errors when both the source and destination parties are in this state. The correct placement of the "created" party depends on the type of transfer being sent; for a standard pay by bank transfer, the source object should have the "created" person, while for a refund from the business to the person, the destination should have the "created" person. To resolve this issue, it is important to ensure the party in the source and destination objects are in the appropriate state.

Customer type

Customer type errors can occur if the improper type (person or business) is used when sending a transfer. For pay by bank transfers, it is important to ensure that the correct customer type is being submitted as the source and/or destination object. The customer type should be the person for the source and a business for the destination for a standard pay by bank transfer. Conversely, for a pay by bank refund, the source and destination objects should be business and person, respectively. If the customer type in either the source or destination object is incorrect, an error may occur. To resolve this issue, it is important to ensure that the correct customer type is being submitted in the appropriate object to prevent any errors during the transfer process.