Unlike real-time payment processing, ACH (Automated Clearing House) transactions through the ACH Network are processed by a network operator at predetermined intervals throughout the business day. Using Dwolla to connect to the ACH Network, businesses can choose to expedite transfer times, but doing so may increase the risk of each transaction.
Note: Expedited transfers are a premium feature and come at additional cost. Reach out to our team to learn more.
Let us explain ACH transfer times through Dwolla (note: all times are Central Standard Time).
When a business utilizes Dwolla’s ACH payment API to access the ACH Network, most transactions with Dwolla are broken into two smaller transactions: from the sender into the Dwolla Network (the “debit”) and out of the Dwolla Network to the receiver (the “credit”).
A transaction with Dwolla goes like this:
Standard ACH Debit: A standard ACH debit through Dwolla will be made available in the Dwolla Network three to four business days after the transfer is sent. Dwolla is not typically notified of an “ACH Return” until at least two business days after an ACH transaction has occurred. To mitigate the risk of returns, the funds associated with a standard ACH debit will not be made available within the Dwolla Network for three to four business days to account for the timeline in which the most common ACH return codes are issued.
If a return is not received (and there are no other concerns of fraud) within that window, funds are made available in the receiving account (in this case, within the Dwolla Network).
Standard ACH Credit: After the funds are made available in the Dwolla Network, the “credit” out to the recipient will take place. Assuming the credit is issued prior to 4 p.m., the funds will be in the receiver’s account the following business day.
To put this in context with Dwolla and standard ACH transfer timing, a bank transfer initiated from a sender’s bank account on Monday by 4 p.m. would be received by the recipient’s bank account on Friday morning. Transfers initiated after 4 p.m. will start processing the next business day.
Dwolla supports ways to expedite these transfer timelines—but faster transfers come with additional risk and a higher cost.
Dwolla offers Next Day ACH for businesses in specific industries where fraud is less likely to occur, in order to provide a speedier option for payments.
A Next Day transfer refers to only the debit portion of a transaction.
With Next Day ACH, if a transfer is initiated on a Monday before 4 p.m., funds are made available within the Dwolla Network on Tuesday.
Dwolla currently only offers Same Day transfers for ACH credits. As long as the transaction is initiated prior to 12 p.m., funds will arrive in the receiving bank account by the end of business that same day.
If a Same Day credit is initiated at 9:30 a.m. on Monday, it will be sent out by noon and arrive in the receiving bank account by the end of business on Monday.
A standard bank transfer is initiated on Monday at 4 p.m through Dwolla. If no ACH return codes are received by Thursday, those funds are made available in the Dwolla Network on that day.
A Same Day Credit will go out at noon on Thursday, sending those funds to the receiver’s bank account. Those funds arrive in the receiving customer’s bank account by the end of the business day on Thursday.
This differs from Standard Transfer Timing through Dwolla as the funds arrive at their destination one day sooner—Thursday compared to Friday.
If a transfer is initiated on Monday by 4 p.m., funds are debited from the sending account and made available in the Dwolla Network on Tuesday.
On Tuesday, a credit to the recipient will be issued. The funds will settle in the receiving customer’s bank account by the end of the business on Wednesday.
A transfer initiated on Monday by 4 p.m. will be made available in the Dwolla Network on Tuesday.
Assuming the Same Day credit is issued prior to 12pm CT on Tuesday, the funds will arrive in the receiving bank account by the end of the banking day on Tuesday.
*Note: All transfers may be subject to delay by either the sending or receiving financial institution, including Dwolla’s partner financial institution.