ACH transfers are electronic bank-to-bank transactions used to send or receive money from  personal or business bank accounts. ACH transfer times are predictable because they are processed at predetermined intervals throughout each business day. 

Knowing when an ACH payment will process and become available requires understanding both when the transfer was initiated and the specific batch processing time being used for that transaction. 

Read on for our explanation of how long ACH transfers take. 

How Long Does an ACH Transfer Take?

ACH transactions with Dwolla are broken into two smaller transactions: from the sender to the Dwolla Network, then from the Dwolla Network to the receiver. 

Here’s an example of how ACH transfer times work with Dwolla:

Standard ACH Transfer Timeline

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 initiated. 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, funds associated with a standard ACH debit are not immediately made available to account for the timeline in which the most common ACH return codes are issued. 

If an ACH return code is not received and there are no other concerns of fraud, funds are made available in the receiving account (in this case, the Dwolla Network). 

Standard ACH Debit

Standard ACH Credit

Once funds are made available in the Dwolla Network, the “credit” to the recipient takes place. 

Assuming the credit is issued prior to the end of the business day, the funds will become available in the receiver’s bank account on the following business day—completing the ACH payment.

How to Make ACH Transfers Faster

To differentiate themselves and bolster their competitive advantage, businesses are offering faster payments for their users to get paid quicker. But as transaction speeds increase, so does the amount of risk involved in each transaction. 

Any account transferring funds using the same day or next day ACH transfer speed could receive a return code even after the funds have settled. 

This happens because the Receiving Depository Financial Institutions (RDFI) has 48 hours to issue most return codes. Dwolla typically receives most return codes on the third day after a transfer is initiated, which is why Dwolla will hold funds as pending until the third day.

Next Day ACH Transfers

Next Day Plus Standard Timeline

A next day transfer with Dwolla refers only to the debit portion of a transaction. 

With Next Day ACH, a transfer initiated at 4 p.m. Eastern Time on Monday would become available within the Dwolla Network on Tuesday. 

Dwolla will not automatically hold Next Day ACH entries as “pending” and will process these transactions on the day after they export. This means return codes such as RO1 (insufficient funds) or RO4 (invalid account number) can still come in after the funds have been processed. 

Same Day ACH Transfers

Next Day Plus Same Day Timeline

With Dwolla, a Same Day ACH transfer refers only to the credit portion of the transaction. 

In 2016, Nacha—the nonprofit association that oversees the ACH Network—adopted a rule to enable same-day payment processing. This rule enhances ACH schedules.

The Nacha batch processing windows are:

  • A morning submission deadline of 10:30 a.m. Eastern Time, with settlement at 1 p.m.
  • An afternoon submission deadline of 2:45 p.m. Eastern Time, with settlement occuring at 5 p.m.

Note that each individual operator sets its own settlement schedule.  For more detail about Dwolla’s specific requirements, check here.  

Same Day ACH has been popular since its release in 2016. According to Nacha, consumers and businesses in 2019 initiated more than 250 million Same Day ACH transactions—totaling $247 billion. 

In December of 2019, Nacha announced an expansion of Same Day ACH, with two major changes impacting both credit and debit transactions: 

  • Same Day ACH per-transaction dollar limit will increase to $100,000 (Effective March, 2020)
  • Same Day ACH transactions can be submitted to the ACH Network for an additional two hours every business day (Effective March, 2021)

For additional information on Same Day ACH rule changes, use this resource from Nacha.

Federal Reserve Batch Processing Times

The Federal Reserve sets specific deadlines for distribution and settlement of daily ACH files. This is the FedACH Processing Schedule

If a deadline is missed, those items will be processed on the next subsequent deadline. 

Contact us to learn more about what specific deadlines Dwolla uses. 

What to Consider When Choosing a Payments Partner

Some items for consideration are obvious, while others are commonly realized after a contract is signed and on the path of a payment integration. 

Here are three aspects to consider when choosing a payment platform for your business. 

Configurability

Can the platform do what’s needed? If every other aspect of the payment integration is perfect, but the solution cannot solve specific functionality requirements, then it doesn’t help. 

Ease of Integration

A payment integration shouldn’t be painful. Integrating an ACH API needs to be straightforward, with resources to help along the way. If integrating is difficult for a team of programmers, why would the onboarding experience be any different for your users?

Payment platforms should offer a testing environment with developer guides, documentation and a community forum. 

User Experience

Having a feature-rich payment platform means very little if the integration does not match the application experience. Sending users to a third party to complete their payment process can erode the trust a business establishes with its customers. 

A white-label ACH API can be branded to match the application—while powering payments in the background. 

Connecting with the ACH Network

At Dwolla, we connect businesses with the ACH Network to move money and offer standard, next day and same day ACH transfer speeds. When a business integrates Dwolla’s ACH API, their users input bank account and routing information to send or receive money through the ACH Network—and an ACH transfer. 

Money moves without using a paper check or paying a costly credit card fee. Dwolla’s ACH API can connect your business with the ACH Network to move money with predictable payment processing times. 

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