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Accepted Payment Methods and Restrictions for Borrower Payments

Audience: All Users (Starter, Core, Pro, Enterprise) Topic: Payment Processing & Collections

Overview

The integrity of your financial portfolio depends on reliable, recurring cash flow. PayPlan’s payment engine is designed to prioritize stability. We support the standard banking rails that ensure you get paid on time, while restricting payment types that require manual intervention.

This article outlines the accepted payment instruments within the platform and explains the reasoning behind restrictions on prepaid cards.

Accepted Payment Methods

PayPlan integrates with major processors like PayLiance to handle the following payment types for both one-time transactions and recurring Auto-Pay schedules.

  1. ACH (Bank Transfer)

  • Best For: Recurring Auto-Pay and large settlements.

  • Why Use It: ACH connects directly to the borrower's checking account. Settlement typically takes 24–48 hours to clear or return. It offers high reliability, though you must monitor for return codes like "R01 Insufficient Funds" or "R02 Account Closed".

  1. Debit Cards (Visa / MasterCard)

  • Best For: Initial down payments and catching up on missed payments.

  • Why Use It: Debit cards offer instant authorization, returning a clear "Approved" (Code 00) or "Declined" status immediately. Because they are linked to a checking account, they offer a layer of permanence similar to ACH.

  1. Credit Cards (Visa / MasterCard)

  • Best For: Borrowers who prefer to leverage their credit lines for repayment.

  • Why Use It: Like debit cards, these offer instant authorization.

  • Note: PayPlan supports Credit Card processing via PayLiance. You must confirm that as a financial provider, that your borrowers can use Credit Cards to make payments.

Restricted: Why We Do Not Accept Prepaid Cards

Prepaid cards are often restricted from being added as a primary payment method for recurring repayment. This is a deliberate decision designed to streamline operations and reduce manual work.

The Strategic Reasoning

We restrict prepaid cards primarily due to Manual Intervention Requirements and Transaction Failures:

  1. The Partial Approval Problem Standard bank accounts (Debit) and Credit Cards generally return a binary "Success" or "Failure" response.

  • Prepaid Risk: Prepaid cards frequently trigger Response Code 10: "Approved for partial amount". This occurs when the card has some funds, but not enough to cover the full payment. PayPlan flags these transactions as requiring "Manual Intervention", which breaks the automation of Auto-Pay and forces your team to manually process split payments.

  1. Lack of Overdraft or Credit Logic Standard accounts often have overdraft protection or credit limits that allow a payment to clear even if the liquid balance is low (Code R3: "Approved with overdraft protection").

  • Prepaid Risk: Prepaid cards simply fail or partially authorize when funds are insufficient, leading to artificial delinquency and increased collections activity.

Managing Payment Methods