Understanding when payments are processed and when you will receive funds can help you manage cash flow and set clear expectations with parents. This guide explains the full journey of a payment, from when it is initiated to when the money reaches your bank account.
How Payment Processing Works
Every payment follows the same basic journey, although the timeline varies depending on the payment method.
1. Payment initiated
When a parent makes a payment, or when you run automatic payments, the payment is created in Famly. It will usually appear as Pending or Processing.
2. Payment completes
The money moves from the parent’s account into your Stripe account. How long this takes depends on the payment method. Card payments are instant, while Direct Debit payments take several days. Once complete, the payment will show as Completed in Famly.
3. Payout to your bank
Completed payments are grouped together and sent to your bank account in a payout. This happens automatically, usually the next business day after a payment completes.
The total timeline: From when a parent pays to when the money reaches your bank account can vary from 1 day (card payments) to around a week (Direct Debit), depending on the payment method.
Card Payment Timeline
How it works
Card payments process instantly. This happens as soon as a parent clicks Pay now, or when automatic payments run.
Card payment timeline from start to finish
Immediate: Payment initiated
Parent makes a payment, or automatic payment runs
Payment processes instantly
If successful, the parent sees confirmation straight away
Payment shows as Completed in Famly
Example card payment timeline
Monday 2pm: Parent pays £100 by card
Monday 2pm: Payment marked Completed, if the payment is successful
Tuesday morning: Money arrives in your bank account
Total: 1 business day
BACS Direct Debit Timeline
How it works
BACS Direct Debit takes longer to process than card payments, but it has the lowest fees. The first time a parent sets up Direct Debit, their bank needs to verify the mandate before payments can be taken.
First-time Direct Debit setup (one-time only)
When a parent first adds Direct Debit:
Parent enters their bank details in Famly
We send the mandate to their bank for verification
The payment shows as Pending during verification
Timeline: 3 business days for mandate verification
Once the mandate is verified, there is an additional waiting period before the first payment can be taken.
Direct Debit timeline from start to finish (after the mandate is active)
Day 0: Payment initiated
Parent makes payment, or automatic payment runs
Payment shows as Processing
Request is sent to the banks to begin the transaction
Days 1–3: Processing
Money is transferred from the parent’s bank to your Stripe account
Payment still shows as Processing
Day 4: Payment completes
Money arrives in your Stripe account
Payment shows as Completed in Famly
Day 5: Payout
Payment is included in the next payout to your bank
Money usually arrives in your bank account the following morning
💡 Payments are generally submitted on the same day that they’re created, but are processed on the following business day if they’re created on a non-business day or after the cutoff time (20:00 Europe/London).
Example Direct Debit timeline
Monday: Parent pays £100 by Direct Debit
Monday–Thursday: Payment processing
Friday: Payment marked Completed
Saturday: Payout sent to your bank (arrives Monday morning)
Total: 4–7 business days
💡 Planning tip: BACS payments can take around a week from initiation to reaching your bank account, so it is important to factor this into your cash flow planning. For first-time Direct Debit users, add extra time for mandate verification and activation
Tax-Free Childcare Timeline
How it works
Tax-Free Childcare payments are processed differently depending on the amount. Smaller payments are usually fast, while larger payments take a few days.
For payments under £2,000
Processing method: Faster Payments
Timeline:
During banking hours (9am–5pm weekdays): Typically within 2 hours
Outside banking hours: Processed the next business day during banking hours
On your bank statement:
Appears as NS&I (National Savings & Investment Bank)
Shows as an individual transaction, not grouped with other payments
Example TFC timeline (under £2,000)
Tuesday 10am: Parent pays £500 via TFC
Tuesday 12pm: Money arrives in your bank account
Total: 2 hours
For Payments £2,000 or more
Processing method: BACS Direct Debit
Timeline:
4–5 business days from initiation to arrival in your bank
On your bank statement:
Appears as the child’s reference number, not “NS&I”
Format: letter + 3 letters + 5 digits (for example, JSMI12345)
Shows as an individual transaction
Example TFC timeline (£2,000+)
Monday: Parent pays £2,500 via TFC
Wednesday/Thursday: Money arrives in your bank account
Total: 4–5 business days
⚠️ What Famly can track: Famly can only see if a payment was initiated via HMRC. We cannot track when it arrives in your bank account, so you will need to check your bank statement to confirm receipt.
💡 TFC payments are individual: Each Tax-Free Childcare payment appears separately on your bank statement. These payments are not grouped into bulk payouts like card and Direct Debit payments.
SEPA Direct Debit Timeline (Ireland only)
How it works
SEPA Direct Debit works similarly to BACS Direct Debit, but it is used for euro-zone countries. It is only available for settings in Ireland.
First-time SEPA setup (one-time only)
When a parent first adds SEPA Direct Debit:
Parent enters their bank details
We send the mandate to their bank for verification
Timeline: 3 business days for mandate verification
Like BACS, new SEPA mandates also need additional time to become active before the first payment can be processed.
SEPA timeline from start to finish (after mandate is active)
Day 0: Payment initiated
Parent makes payment, or automatic payment runs
Payment shows as Processing
Days 1–7: Processing
Money transfers from the parent’s bank to your Stripe account
This typically takes 7–8 business days
Day 7–8: Payment completes
Money arrives in your Stripe account
Payment shows as Completed
Day 8–9: Payout
Payment is included in the next payout to your bank
Example SEPA timeline
Monday: Parent pays €100 via SEPA
Next Tuesday/Wednesday: Payment marked Completed
Wednesday/Thursday: Money arrives in your bank
Total: 8–10 business days
Understanding Payment Statuses
As payments move through the system, you may see different statuses in Famly, including:
Pending
Processing
Completed
Failed
Requires validation
Pending
What is happening: The payment has been created but has not started processing yet.
Common reasons:
A BACS or SEPA mandate is being verified by the bank (takes 3 days)
A new mandate is waiting to become active (additional processing time)
The parent entered an incorrect billing address
The name on the payment method does not match the bill payer
What to do: For new Direct Debit users, this is normal and you should allow time for mandate verification and activation. For other cases, wait 2–3 business days. If the payment is still pending after that, check the payment details or ask the parent to confirm their information.
Processing
What is happening: The payment is moving through the banking system.
This means:
For Direct Debit, money is being transferred from the parent’s bank to your Stripe account
For card payments, the payment has been approved and is being transferred
For Tax-Free Childcare, the payment request has been sent to HMRC
The parent’s balance in Famly updates automatically
What to do: Nothing is required. This is normal and the payment should complete once processing finishes.
Completed
What is happening: The payment has successfully gone through and the funds are now in your Stripe account.
What happens next:
The payment will be included in your next payout
The payout will be sent to your bank account, typically the next business day
What to do: Nothing is required, the payment has been successful.
Failed
What is happening: The payment could not be completed.
Common reasons:
Not enough money in the parent’s account
Card expired or declined
Incorrect postcode or address
Bank account closed
BACS mandate revoked
What to do: Check the failure reason in the payment details, then contact the parent to explain what went wrong. They will need to retry the payment manually, as failed payments are not automatically retried.
See Troubleshooting Payment Issues for detailed guidance on fixing specific errors.
Requires Validation
What is happening: The payment needs an extra security check from the parent.
Why this happens: Some banks require additional verification for fraud prevention, similar to a password or approval step for online purchases.
What to do: The parent will receive an in-app notification. They need to log in, click Validate, and complete the verification with their bank. They have 5 days to do this before the payment automatically fails.
See Payments Requiring Validation for more details.
How Payouts Work
What is a payout?
A payout is when money is transferred from your Stripe account to your business bank account. Once payments are marked as Completed, they are automatically included in the next payout.
Payout grouping
Payments are grouped together:
All payments from the same day are grouped into one bulk payout
This reduces the number of transactions shown on your bank statement
Exception: Tax-Free Childcare
Each Tax-Free Childcare payment appears individually on your bank statement
These payments are not grouped into bulk payouts
They show as “NS&I” or the child’s reference number
Payout schedule
Standard timeline:
Completed payments are included in the next day’s payout
Payouts are sent to your bank account overnight
Money is typically available the following morning, depending on your bank
Example:
Monday: several card payments complete
Tuesday morning: bulk payout arrives in your bank containing all Monday’s card payments
What payouts look like on your bank statement
Default appearance:
Payouts typically show as “Famly” or “Stripe” on your bank statement.
Custom statement descriptors:
You can set a custom descriptor in your settings. This is especially useful if you manage multiple locations. You can find this under Settings → Finances → Invoicing and payments → In-app payments → Statement descriptors.
Viewing Payout Reports
To access a report of your In-app payment payouts:
Head to Finances
Go to Reports
Find the In-app payment payout report
What you will see on the Payout report
Started section:
Payments that have been initiated but have not completed yet, such as Direct Debit payments that are still processing.
Completed section:
Payments that have completed successfully and are currently in your Stripe account waiting for the next payout.
In payout section:
Payments that are scheduled for payout or have already been sent to your bank.
Payouts list:
A list of all past and pending payouts. You can click into any payout to see which individual payments it contains. On the right-hand side, you will see the total payout amount with processing fees shown in brackets. For example, £1,850.00 (£35.40) means you received £1,850 after £35.40 in fees were deducted.
Planning Your Cash Flow
Quick reference: when will money arrive?
Payment method | Money arrives in your bank |
Card payments | 1–2 business days |
BACS Direct Debit | 4–5 business days* |
TFC under £2,000 | 0–1 business day |
TFC £2,000+ | 4–5 business days |
SEPA Direct Debit | 8–10 business days* |
* For first-time Direct Debit users, extra time is required for mandate verification (3 days), and this is added to the timeline.
💡 Remember: These timelines start from when the payment is initiated, not from when you schedule an automatic payment run