Electronic Payment Processing

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Electronic Payment Processing

Zuora Payments supports various electronic payment methods, including credit cards, ACH, debit cards, and PayPal. After an electronic payment is created, the Payment Status in Zuora immediately changes depending on the response that is received from the network. Payment Status can be one of the following values for an electronic payment:

  • Processing
  • Processed
  • Error
  • Voided

Payment Card Processing

For payment card (credit card or debit card) transactions, Payment Status is set based on the response that Zuora receives from the payment card network. The response is usually an immediate approval or a decline for a payment. For example, a Processed payment means that the transaction is approved for payment by the payment card network after the network checks the account information and available balance. If a decline is received from the payment card network, the Payment Status should be Error in Zuora.

Direct Debit Processing

For ACH or Direct Debit transactions, there is no immediate approval for a payment. Instead, the direct debit network will respond with an initial approval or decline after checking the format of the bank account number, the transit routing number, and other specific direct debit information. If Zuora gets an initial approval from the direct debit network, the Payment Status is Processed. If a decline is received by Zuora, the Payment Status should be Error. A processed payment in Zuora will decrease the invoice balance, even though the ACH or Direct Debit payment might fail later.

Gateway Reconciliation Consideration

The Gateway State in Zuora is mainly used for gateway reconciliation. Gateway reconciliation is a process that is performed by Zuora to verify that the electronic payment and refund transactions that are processed in Zuora match the transactions that are reported by the gateway.

The gateway reconciliation feature utilizes the gateway's reconciliation report (also known as settlement report) to automatically update Gateway State in Zuora. It can also automatically create an external refund when a rejected or reversed payment occurs. For more information about the gateway reconciliation feature and the supported gateways, see Gateway Reconciliation.

With Gateway Reconciliation enabled, the Gateway State can be one of the following values:

  • Submitted
  • NotSubmitted
  • Settled
  • FailedToSettle

After the payment transaction is submitted to the bank successfully, the Gateway State is Submitted. Otherwise, the Gateway State is NotSubmitted. If the Gateway State is changed to Settled in Zuora, it means the payment has been accepted and processed by the bank. For payment cards, payment settlement can take up to 3 business days. For ACH or Direct Debit, it is possible that settlement fails then the Gateway State is changed from Submitted to FailedToSettle.

If the Gateway Reconciliation is not enabled, the Gateway State value always remains the same. For a processed payment, the Gateway State is Submitted. For a voided payment, the Gateway State is NotSubmitted. In this case, you can ignore Gateway State and focus on Payment Status.

Payment Status and Gateway State

For detailed descriptions about Payment Status and Gateway State, refer to the table below.

Field Name Field Value Description
Payment Status Processing The payment is being processed or the payment is on hold because appropriate confirmation is not received from the gateway. In the latter case, contact Zuora Support for next steps.
Processed

The payment is approved by the network.

  • For payment cards, an immediate approval is received for payment from the payment card network after the network checks the account information and available balance.
  • For ACH or Direct Debit, an initial approval is received from the direct debit network after the network checks the bank account number, transit routing number, and other direct debit information.
Error

The payment is declined by the network due to some error.

  • For payment cards, a decline is received from the payment card network. It might be caused by insufficient balance or wrong account information.
  • For ACH or Direct Debit, a decline is received from the direct debit network. It might be caused by the wrong direct debit information.
Voided The payment is voided before it is settled.
Gateway State Submitted The payment is submitted to the bank.
NotSubmitted The payment is not submitted to the bank.
Settled The payment is successfully debited from the payer and credited to the payee.
FailedToSettle A settlement error or a post-settlement exception occurs. The payment might be rejected by the back, or a chargeback for credit card or a reversal for direct debit might occur.
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