How do payment by bank transfers work?

Bank transfers

👉   How it works

👉   Main statuses of a bank transfer

👉   Make sure transfers are credited quickly

👉   Special cases

👉   Unidentified and uncredited transfers

👉   Refund a bank transfer

👉   Set up a dedicated IBAN

👉   Ibanisation of payment accounts

How it works

Once bank transfer payment (Money-In) is enabled, we will furnish you with an IBAN (given to all our partners) and a reconciliation code (typically the Matching Code of your platform followed by the external ID of the beneficiary payment account in the format MATCHINGCODE-IDEXT). You will be required to enter this information on your website or app during the payment process. This will ensure that we can accurately credit the received transfer to the appropriate payment account upon receipt.

The information your customers should provide when submitting a transfer request via their bank's website or app is listed below:

• Beneficiary name: Lemonway 
• Beneficiary IBAN: the IBAN that we provide you with
• BIC code of the Beneficiary's Bank (if requested): the BIC code that we provide you with
• Description: the reconciliation code following the format that we have provided (maximum 35 characters): ENVIRONMENTMATCHINGCODE-EXTID

Receiving a wire transfer and crediting it to the beneficiary's payment account results in the automatic creation of a transaction in your system environment with a Completed status (Type = Incoming/Method = Transfer/Status = Completed), and in fees being charged by Lemonway 👉Learn more about fees here

The most frequent causes of delayed credits or the inability of Lemonway to credit the incoming wire transfer to the beneficiary payment account are listed below:

• Beneficiary payment account in KYC status (e.g. KYC1 - not verified clients- or amount limits exceeded) prevents us from crediting the transfer received to the beneficiary payment account
• Beneficiary payment account/external ID that does not exist in your system
• The name of your system appears in the transfer description, but your customer does not specify the external ID of the beneficiary payment account
• There is no reference to the name of your system or of your external ID of the beneficiary payment account, preventing us from linking the bank transfer received to your platform
• The issuer's name is different from the account owner.

In the 3 first cases, you will receive, by email, a pending list every Tuesday and Thursday with the pending wires. If you want to add or remove someone from the list of addressees, please write a ticket.

Main statuses of a bank transfer

Bank transfers can have multiple statuses:

✅ Completed: the transaction was successful and the transaction amount is credited to the target payment account, increasing the account balance

If the transaction is incomplete and failed to be credited to the target payment account, it will not appear in the Dashboard.

Make sure transfers are credited quickly

Lemonway automatically checks the identity of the sender of an incoming wire transfer into your system against the identity of the holder of the destination payment account (excluding e-commerce, marketplace, and factoring-type activities for the debtor - no verification is required).

In order for an incoming wire transfer to be credited automatically to the destination payment account on D+1 (D = banking business day of receipt by Lemonway), it is essential that:

• The transfer originates from a bank account held by the holder of the beneficiary payment account (except in the event of joint bank accounts - details below).
• The transfer text contains the reconciliation code (MATCHINGCODE-EXTID).

In any case, an account must be KYC2 before it can be used by one of your clients.

Special cases

Joint accounts

From 1st September 2023, Lemonway no longer permits the creation of joint accounts to open payment accounts. Please consult this article to learn more.

Transfers issued by a company

A transfer originating from a company bank account can only be credited to a payment account held by a legal person. For verification purposes, you may be asked for the issuing bank account number to ensure that it is a corporate account.

Transfers originating from a sender without a payment account

In this particular case, there are two solutions:

1. If the payment account is not yet KYC2 (verified client) and has never received any payment funds: rename the account, and provide the corresponding necessary KYC documents
2. Create a new payment account in the name of the sender of the transfer and provide the external ID of the payment account to be credited.

Unidentified and uncredited transfers

In the case of a joint account or a transfer issued by a company, we will send you a list of received and unmatched bank transfers by email (twice a week), together with the action/decision expected from you in order for us to be able to credit the funds correctly. You have the option to receive a pending list (transfers waiting to be credited) every day. 👉 Contact Lemonway Support for more information.

Refund a bank transfer

How it works

When the payor’s bank transfer qualifies as a SEPA Credit Transfer (standard or instant) under our eligibility rules, you can request an automatic refund.

• Via API: Use the Refunds endpoint to initiate your refund.
• Via Dashboard: Submit your refund directly in the Lemonway Dashboard.

Once approved, funds will be returned to the payor within 2–3 business days.

If the transfer is not eligible for an automatic refund, you must perform an outgoing transfer. Detailed steps are available in our Outgoing Transfer article.

This refund feature applies to all wire-transfer products, including:

• Standard bank transfers
• Virtual IBAN transfers
• PayByBank transfers

Eligibility Rules

A wire-transfer deposit is refundable only if all of the following are true:

1. Debtor’s name is on file with Lemonway.
2. Debtor’s bank account number is known.
3. Debtor’s BIC/SWIFT code is provided.
4. The original payment was sent by the payer as either a SEPA Credit Transfer or an Instant SEPA Credit Transfer.
5. The deposit was posted to the partner’s system within the last 365 days.
6. The Money-In transaction is marked Completed, and no part of it has already been refunded or reversed via chargeback.

💡 If any of these conditions are not met, the refund request will be declined, and you’ll receive an error explaining why.

Refund Options

Lemonway customers have access to the following refund types:

• Full refund: The entire amount of the original Money-In transfer is refunded.
• Partial refund: Only a portion of the original amount is refunded.
• Multiple refunds: Several partial refunds can be issued, as long as their total doesn’t exceed the original transaction amount.

Set up a dedicated IBAN

Depending on the volume of your incoming wire transfers, it may be worth considering a dedicated IBAN/bank account with Lemonway.

A dedicated IBAN (a bank account in the name of Lemonway but whose details are not shared with other partners and are known only by you) allows you to:

• Maximize the amount credited: incoming bank transfers from your customers that do not include your platform name (and which we would thus be unable to identify in accounts shared by all our partners) are never "lost" and returned to the originators.
• Improve lead times for crediting: bank transfers received into dedicated bank accounts are treated as a priority. You are notified twice a week of unmatched/pending transfers, allowing you to take appropriate action (e.g. incorrect KYC status of the beneficiary payment account) promptly for faster crediting to the payment account.

💡 From now on, you will benefit from a dedicated IBAN account for new signatories. If you would like more information or would like to change your account type (you did not choose a dedicated IBAN account when you signed your contract), 👉 contact us

Ibanisation of payment accounts

Lemonway may provide virtual IBANs, also known as VIBANs, to facilitate the receipt and reconciliation of incoming bank transfers.

A VIBAN is a technical IBAN associated with a Lemonway payment account. It allows the payment account to be automatically identified when a bank transfer is received. The purpose is to simplify the processing of incoming transfers, especially by reducing cases where a payment reference is missing or incorrect.

In practice, when an end user makes a bank transfer to the VIBAN provided, Lemonway can use this VIBAN to identify the relevant payment account and facilitate the crediting of funds, subject to standard banking processing times and applicable controls.

Using a VIBAN can help you:

• facilitate the reconciliation of incoming bank transfers;
• reduce pending transfers caused by missing or incorrect payment references;
• streamline the operational processing of received transfers;
• reduce the exchanges required to identify transfers to be credited.

Best practices when communicating with end users

When communicating bank transfer details to your end users, it is important to correctly present how the VIBAN works.

The VIBAN is a technical tool used by Lemonway for payment reconciliation purposes. It must therefore not be presented as a personal IBAN, a personal bank account, or an account belonging to the end user.

You must also ensure that:

• the beneficiary of the transfer is always indicated as Lemonway;
• the VIBAN is not presented as belonging to the end user;
• no reference to Lemonway’s banking partners appears in any end-user communication, unless Lemonway has given prior written authorisation.

Transfers using a bank reconciliation code remain possible where this method is provided for. Both processes may be compatible depending on your configuration.