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# Payment processing

Tabs Pay handles the whole path a payment takes, from the moment your customer opens an invoice to the moment it's marked paid. Most of it runs on its own—your customer pays, Tabs confirms the payment, and your records update without anyone touching them.

This page covers what happens at each stage, so you know what your customers see and what to expect in the Tabs app.

## The payment lifecycle

Every Tabs Pay payment follows the same path. An invoice is issued and emailed to your customer with a payment link. The customer opens the link, lands in your payment portal, and pays by card or bank account. Tabs confirms the payment with the card network or the customer's bank, records a payment against the invoice, and marks the invoice paid—or pending when cash application is enabled. The funds then settle into your Tabs Pay balance and go out on your payout schedule.

## The payment link

Every invoice email carries a payment link unique to that invoice. Your customer doesn't need a Tabs account or a password—the link opens the invoice and its payment options directly.

A link stays valid for as long as the invoice is open. If a customer can't find theirs, resend the invoice from the Tabs app.

## What your customer sees

The portal shows the amount due and the payment methods you accept. You choose those in your billing settings, and you can set thresholds on them—allowing card payments below a certain amount and requiring bank payments above it, for example.

Customers can save a card or bank account while they pay. A saved method comes back as a one-click option on the next invoice, and customers can add, replace, or remove their saved methods from the portal at any time.

## Paying by bank account

The first time a customer pays you from a bank account, Tabs validates the account details in real time, as part of the payment itself.

This replaces the microdeposit flow you may be used to, where a customer entered their bank details, waited one to two business days for two small deposits to land, then came back to confirm the amounts before anything could be charged. That wait is gone.

What changes is the shape of the failure. Validation now either passes or fails outright, so a bank account Tabs can't verify is declined immediately rather than left pending. Your customer is prompted to use a different account or pay by card.

## When an invoice is marked paid

Tabs marks an invoice paid once the payment is authorized—once the card network or the customer's bank has approved the charge.

If you use cash application, the invoice moves to pending instead, and stays there until your payout lands and Tabs matches it to the bank deposit.

Authorization isn't the same as having the money. The funds settle into your Tabs Pay balance afterward and reach your own bank account on your payout schedule. An invoice can read paid in the Tabs app while the cash is still moving.

> **Note**
>
> This is why your invoice records and your bank balance won't agree at any given moment. Both are right—they're measuring different things. See [Balance accounts and payouts](/collect-payments/tabs-pay/balance-accounts-and-payouts) for how long the gap runs.

## An example

Say Balloon Corp owes \$1,200 on an invoice due the 15th.

1. Tabs emails the invoice on the 1st with a payment link.
2. On the 12th, their accounts payable clerk opens the link and sees \$1,200 due, with card and bank account offered.
3. She pays from the company checking account and saves it for next time. Tabs validates the account and accepts the payment.
4. The invoice moves to paid and a payment for \$1,200 is recorded against it.
5. The funds settle into your Tabs Pay balance and go out with your next payout.
6. On next month's invoice, the saved account is waiting as a one-click option.

## Next steps

* Find out when funds reach your bank—see [Balance accounts and payouts](/collect-payments/tabs-pay/balance-accounts-and-payouts)
* Handle a payment a customer disputes—see [Disputes and chargebacks](/collect-payments/tabs-pay/disputes)
* Return a payment—see [Refund processing](/collect-payments/tabs-pay/refunds)