Funds Flow & Payout Timing

Understanding when and how merchants receive their money through Violet with Stripe

This guide explains exactly how and when funds move from a shopper's payment to a merchant's bank account when using Violet with Stripe and automatic transfers. Understanding this flow helps resolve common confusion about payment timing and "pending" balances.

Applies to: Channels using Stripe as the payment provider with AUTOMATIC transfer method. For other configurations, see Transfer Settings and Scheduled Transfers.

The Three Phases of Funds Movement

When a shopper places an order, funds move through three distinct phases before reaching the merchant's bank account:

┌─────────────────────────────────────────────────────────────────────────────────┐
│  PHASE 1: TRANSFER          PHASE 2: SETTLEMENT         PHASE 3: PAYOUT        │
│  ─────────────────          ─────────────────────       ────────────────        │
│                                                                                  │
│  Shopper pays               Stripe clears the           Stripe sends to         │
│       ↓                     card payment                merchant's bank         │
│  Channel Stripe ──────→ Merchant Stripe ──────────→ Merchant Bank              │
│       │                     │                           │                        │
│  ~30 seconds               2-3 business days           1-2 business days        │
│  (programmatic)            (pending → available)       (per payout schedule)    │
│                                                                                  │
└─────────────────────────────────────────────────────────────────────────────────┘

Phase 1: Transfer (Immediate)

When a shopper completes checkout:

1. Payment is captured by Stripe

2. Funds land in the channel's Stripe balance

3. Violet creates a Distribution defining the commission split

4. Violet creates a Stripe Transfer to the merchant's Stripe Connect account

5. The transfer posts immediately to the merchant's Stripe balance

Timing: Steps 1-5 complete programmatically in approximately 30 seconds, including retries for transient failures.

Key point: The transfer to the merchant's Stripe account happens immediately. There is no additional transfer processing delay.

Phase 2: Settlement (2-3 Business Days)

After the transfer posts to the merchant's Stripe account:

• Funds appear in the merchant's Stripe Express dashboard

• Funds are visible as part of their Stripe balance

• However, funds may be marked as "pending" rather than "available"

Why "pending"?

This reflects Stripe's settlement and risk-clearing window for the original card payment. It typically takes 2-3 business days for card payments to fully clear.

This is NOT a delay in moving money. The funds are already in the merchant's Stripe account. "Pending" simply means they aren't yet eligible to be paid out to a bank account.

Phase 3: Payout (Per Schedule)

Once funds become "available" in Stripe:

1. Stripe initiates a payout based on the configured payout cadence

2. The bank receives and processes the deposit

Payout cadence options:

• New accounts: 7-day rolling basis after first sale

• Established accounts: 2-day rolling basis

• Custom schedules: Available for high-volume merchants

Bank processing: After Stripe initiates the payout, banks typically settle funds in 1-2 business days, depending on local banking rails.

Example Timeline

Here's a real-world example showing when a Monday afternoon order would hit the merchant's bank:

Step	What Happens	When
Order placed	Shopper completes checkout	Monday 2:00 PM
Transfer created	Violet creates Stripe Transfer	Monday 2:00 PM (~30 sec)
Funds visible in Stripe	Transfer posts to merchant Stripe	Monday 2:00 PM
Settlement complete	Funds move from "pending" to "available"	Wednesday-Thursday
Payout initiated	Stripe sends to bank (2-day rolling)	Thursday evening
Bank deposit	Funds appear in merchant's bank	Friday-Saturday

End-to-end: Approximately 5-7 business days from order to bank deposit (not counting weekends/holidays).

Common Confusion Points

"Why do my funds show as pending?"

The transfer was successful. "Pending" is Stripe's standard hold while the original card payment clears. No action is required—funds will automatically become available.

"The transfer was instant but I haven't been paid yet"

Correct. The transfer to your Stripe account is instant. The payout to your bank happens on a schedule (2-day or 7-day rolling) after funds clear.

"What determines my payout schedule?"

Payout cadence is configured by the channel (platform) as part of Stripe Connect settings. New accounts typically start with a 7-day rolling schedule, moving to 2-day after establishing history.

Terminology Reference

Term	Definition
Transfer	Movement of funds from channel's Stripe to merchant's Stripe Connect account
Distribution	Violet's record of how funds are split (commission, fees, merchant payout)
Pending Balance	Funds in Stripe that haven't cleared settlement yet
Available Balance	Funds in Stripe that can be paid out to a bank
Payout	Movement of funds from Stripe to a bank account
Payout Cadence	The schedule on which Stripe initiates bank payouts

Related Documentation

• Transfers - Technical details on Transfer objects

• Distributions - How fund splits are calculated and recorded

• Stripe Connect - Stripe integration details

• Scheduled Transfers - Configuring delayed or batched transfers

• Transfer Settings - Configuring AUTOMATIC, CUSTOM, or EXTERNAL transfers