Payouts

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Overview

1. Customer completes purchase → Payment processed by payment gateway/PayPal
2. Processing fees deducted (payment processor/PayPal + Pocketsflow platform fee)
3. Net amount added to your pending balance
4. After holding period, moves to available balance
5. Automatic payout sent to your bank account on schedule

• Pending balance: Funds in holding period, not yet available for payout
• Available balance: Funds ready to be paid out
• Payout schedule: How often you receive payouts
• Holding period: Time before funds become available (usually 2-7 days)

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Payout Methods

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Integrate Payment Gateway to Access Payouts (Bank, Crypto, etc.)

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Required for payouts

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Step 1: Access Payout Settings

1. Go to Settings → Payments → Payouts
2. Click Configure Payouts
3. Redirected to your payment gateway dashboard

1. Log in to your payment gateway dashboard
2. Go to Settings → Payout settings (location may vary by provider)

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Step 2: Add Bank Account

• Bank name
• Routing number (9 digits)
• Account number
• Account type (Checking or Savings)
• Account holder name (must match verified name)

• IBAN (International Bank Account Number)
• Bank name
• Account holder name
• BIC/SWIFT code (optional)

• Account number or IBAN
• SWIFT/BIC code
• Bank name and address
• Account holder name
• Currency

1. Payment Gateway Dashboard → Settings → Payout methods
2. Click Add payout method
3. Select country and method type (bank, crypto wallet, etc.)
4. Enter account details
5. Click Add payout method

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Step 3: Verify Payout Method

1. Payment processor sends 2 small deposits (< $1) to your account
2. Check your bank statement in 1-2 business days
3. Return to payment gateway dashboard
4. Enter the exact amounts (e.g., $0.32 and$0.45)
5. Click Verify

1. Click Verify instantly
2. Log in to your bank account
3. Authorize payment gateway to verify
4. Verification complete immediately

1. Upload recent bank statement showing account details
2. Payment gateway reviews within 1-2 business days
3. Receive verification email

1. Send small test transaction to verify ownership
2. Or sign message with private key
3. Verification usually instant

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Step 4: Set Default Payout Method

1. Payment Gateway Dashboard → Payout methods
2. Find desired method
3. Click ⋯ (more options)
4. Select Set as default

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Payout Schedules

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Holding Periods

• Fraud prevention and risk management
• Allow time for refunds/chargebacks
• Comply with payment processor requirements

Day 1 (Monday): Customer purchases → Payment captured
Day 8 (Next Monday): Funds become available
Day 8 (Next Monday): Included in weekly payout
Day 11 (Thursday): Payout arrives in bank account
Total: ~10 days from purchase to bank account

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Viewing Payout History

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Payout Dashboard

• Payout date: When funds were sent
• Arrival date: When funds arrive in bank (estimated)
• Amount: Net payout after fees
• Status: Pending, In Transit, Paid, Failed
• Destination: Last 4 digits of bank account
• Breakdown: Link to included orders

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Payout Details

Gross Revenue:              $1,500.00

Deductions:
- Processing Fees:           -$46.20
- Pocketsflow Platform Fee:  -$75.00 (5%)
- Refunds:                   -$50.00
- Chargebacks:               -$100.00
                            --------
Net Payout:                 $1,228.80

Status: Paid
Bank Account: **** 1234
Expected Arrival: Jan 15, 2025

• List of all orders in this payout
• Order IDs, dates, amounts
• Product names
• Customer emails (masked for privacy)
• Individual fees for each order

• Click Export CSV for accounting
• Includes all transaction details
• Import into QuickBooks, Xero, Excel

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Balance Timeline

• Orders still in holding period
• Grouped by availability date
• “Available on Jan 10” - 5 orders - $450

• Ready to be paid out
• Included in next scheduled payout

• Funds held in reserve
• Released based on payment processor’s risk assessment
• Contact payment provider support to adjust

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Multi-Currency Payouts

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Accepting Multiple Currencies

1. Payment Gateway Dashboard → Settings → Multi-currency
2. Enable Presentment currencies
3. Select currencies to accept:
   • USD, EUR, GBP, CAD, AUD, etc.
4. Add bank accounts or crypto wallets for each currency
5. Save settings

• Customer pays in their local currency (e.g., EUR)
• You receive payout in that currency (if bank account configured)
• Or auto-convert to your default currency

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Currency Conversion

• Add EUR bank account → Receive EUR payouts
• Add GBP bank account → Receive GBP payouts
• Avoid conversion fees
• Best for frequent international sales

• All currencies auto-convert to USD (or default)
• Single bank account needed
• Simpler accounting
• Conversion fee: +1% above mid-market rate

Customer pays: €100 (EUR)
Conversion rate: 1.10 (€1 = $1.10)
Converted amount: $110
Conversion fee (1%): -$1.10
Net payout: $108.90

• High-volume international sales: Use local currency bank accounts
• Occasional international sales: Auto-convert to default currency

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PayPal Payouts

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PayPal Payout Settings

1. Customer pays via PayPal → Funds go to PayPal balance
2. PayPal fees deducted (2.99% + $0.49)
3. Pocketsflow platform fee deducted (5%)
4. Net amount stays in PayPal balance
5. Transfer to bank manually or automatically

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Transferring PayPal Funds to Bank

1. Log in to PayPal
2. Go to Wallet
3. Click Transfer Money
4. Select Transfer to bank
5. Choose bank account
6. Enter amount
7. Click Transfer

1. Click Transfer Money
2. Select Instant Transfer
3. Choose debit card or bank account
4. Enter amount
5. Fee shown (1% of amount, max $10)
6. Click Transfer Now

1. PayPal Settings → Payments → Automatic transfers
2. Enable Automatically transfer funds
3. Set schedule:
   • Daily (if balance > $X)
   • Weekly on [day]
   • Monthly on [date]
4. Set minimum transfer amount
5. Save

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Tax Forms & Reporting

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US Tax Reporting (1099-K)

• US sellers who meet IRS thresholds:
  • 2024+: $600+ in gross sales (regardless of transaction count)
  • Prior years: $20,000+ AND 200+ transactions

• Tax form reporting gross payment volume
• Sent by your payment processor (payment gateway, PayPal)
• You receive copy by January 31
• IRS receives copy automatically

• Reports GROSS sales (before fees)
• You report NET income on tax return
• Deduct processing fees, refunds, business expenses
• Consult tax professional for guidance

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Accessing 1099-K

1. Payment Gateway Dashboard → Reports → Tax forms
2. Select tax year
3. Download 1099-K PDF
4. File shows:
   • Gross sales amount
   • Number of transactions
   • Your tax ID
   • Payment processor’s EIN

1. PayPal → Statements & Tax → Tax forms
2. Select year
3. Download 1099-K

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International Tax Forms

• Required to claim tax treaty benefits
• Avoid 30% US withholding tax
• Complete in payment gateway dashboard
• Update every 3 years

• EU: VAT registration if > €10,000 sales per year
• UK: VAT registration if > £85,000 sales per year
• Australia: GST registration if > AU$75,000 sales per year
• Tax calculation services help calculate, but you file returns

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Payout Failures & Troubleshooting

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Why Payouts Fail

1. Incorrect bank details: Wrong routing/account number
2. Closed account: Bank account no longer active
3. Name mismatch: Account holder name doesn’t match verification
4. Bank rejected: Fraud prevention, account type restrictions
5. Insufficient funds: Negative balance due to refunds/chargebacks

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Resolving Failed Payouts

1. You receive email notification
2. Funds returned to available balance
3. Payout status shows “Failed” with reason
4. Update bank account information
5. Retry payout automatically on next schedule (or manual)

1. Check payout method details:
   • Payment Gateway Dashboard → Payout methods
   • Verify account/wallet details are correct
   • Confirm account is active and accepting deposits
   • Check account holder name matches exactly
2. Update information if incorrect:
   • Add new bank account
   • Set as default
   • Delete old account
3. Contact bank:
   • Confirm account can receive ACH/wire transfers
   • Check for any restrictions or holds
   • Verify account is in good standing
4. Retry payout:
   • Automatic on next schedule
   • Or request manual payout if enabled

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Bank Account Verification Issues

1. Wait full 1-2 business days (not calendar days)
2. Check for deposits under $1.00
3. Look under multiple possible descriptions:
   • Your payment processor name
   • “ACCTVERIFY”
   • “MICRODEPOSIT”
   • “VERIFICATION”
4. Contact bank if still not visible
5. Request new micro-deposits in payment gateway (after 3 days)

1. Double-check amounts entered (include cents: $0.32, not$0.3)
2. Look for any pending deposits that might be verification
3. Only 3 attempts allowed - contact payment provider support if stuck
4. Alternative: Use bank statement upload method

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Payout Reserves

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What Are Reserves?

• New account with limited history
• High chargeback or refund rates
• Sudden increase in sales volume
• High-risk industry or product type
• Recent disputes or fraud concerns

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Managing Reserves

1. Payment Gateway Dashboard → Balance
2. See “Reserve” section if applicable
3. Shows:
   • Current reserve amount
   • Reserve type and percentage
   • Release schedule

• Build positive selling history
• Keep refund rate < 5%
• Respond quickly to disputes
• Maintain low chargeback rate (< 0.65%)
• Provide excellent customer service
• Contact payment provider support to review reserve policy

• Rolling reserves: Released after X days
• Fixed reserves: Contact payment provider to negotiate release
• Based on improved account standing

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Best Practices

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Optimizing Payout Speed

1. ✅ Complete verification immediately
2. ✅ Build selling history (30+ days)
3. ✅ Maintain low refund rate (< 5%)
4. ✅ Zero chargebacks
5. ✅ Use daily payout schedule

• Longer account history = shorter holds
• Excellent customer support = fewer disputes
• Clear product descriptions = fewer refunds
• Delivery confirmations = fraud prevention

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Accounting & Bookkeeping

1. Export payout CSV for the month
2. Import into accounting software
3. Categorize:
   • Revenue (gross sales)
   • Expenses (processing fees, platform fees)
   • Refunds (negative revenue)
4. Reconcile with bank statements
5. File tax returns quarterly or annually

• QuickBooks Online
• Xero
• Wave (free)
• Bench Accounting (with bookkeepers)

• Track all business expenses
• Save receipts for deductions
• Quarterly estimated tax payments (US self-employed)
• Work with CPA or tax professional

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Cash Flow Management

Sale Date: Jan 1
Holding Period: 7 days
Available: Jan 8
Payout Schedule: Weekly (Monday)
Next Payout: Jan 13 (Monday after Jan 8)
Bank Arrival: Jan 15 (+2 days)
Total: 14 days from sale to cash

• Keep 1-2 months operating expenses in reserve
• Don’t rely on same-day fund access
• Budget based on net income after fees

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FAQ

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When will I receive my first payout?

• First sale: Jan 1
• Holding period: 7 days
• Next weekly payout: Jan 13 (Monday after Jan 8)
• Bank arrival: Jan 15
• Total: ~14 days

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Can I change my payout schedule?

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Why is my payout less than my sales?

• Payment processor fees (varies by provider)
• Pocketsflow platform fee (5% on free plan, 0% on pro)
• Refunds issued
• Chargebacks lost
• Currency conversion fees (if applicable)

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Can I have payouts sent to multiple bank accounts?

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What if I close my bank account after setting it up?

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Do I pay fees on refunds?

• Sale: $100 → You receive$91.80 (after fees)
• Refund: Customer gets $100 back
• You lose: $8.20 (processing fee + platform fee you already paid)
• You’re refunded: $5.00 (platform fee)
• Net loss: Processing fee (usually non-refundable)

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How do I handle international bank transfers?

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Next Steps