Overview
ACH Transactions
Section titled “ACH Transactions”Automated Clearing House (ACH) is a common and cost-effective method to move payments between U.S. bank accounts. It’s ideal for payroll, vendor payments, and recurring billing.
This guide explains what happens when your business submits an ACH transaction through FLEX, what to expect, and how to handle different outcomes.
flowchart LR
A[Merchant/LMS] -->|1: Dropoff files| B[Files]
B@{ shape: docs}
B -->|2: Files sent to Flex| C[FLEX]
C -->|3: Confirm receiving of files| A
C -->|4: Transaction info sent| D[Bank]
What You Need to Know
Section titled “What You Need to Know”- ACH payments are not instant - they typically take 1-2 business days to be settled
- Transactions may fail or be returned days later
- It is best practice to monitor for returns after the transaction has been carried out
- Use ACH for recurring payments or large transactions where low fees are priority
Life of an ACH Transaction
Section titled “Life of an ACH Transaction”1. Payment Is Submitted
Section titled “1. Payment Is Submitted”Your customer provides their bank info during checkout, or your system stores it securely. When a charge is initiated, Flex begins the ACH process.
The transaction is then queued by the Flex team to be sent at the next ACH clear time.
2. Funds In Transit
Section titled “2. Funds In Transit”The bank begins moving the funds. ACH is a batch system - it’s not real time like a credit card. You won’t receive money instantly.
During this time:
- You may still cancel the transaction if it hasn’t left the bank yet
- It’s safest to wait for confirmation before shipping good or services
3. Payment Settles
Section titled “3. Payment Settles”Once the money clears and is deposited into your account, the status changes to “successful.” This means the payment has been finalized and is unlikely to be reversed.
4. Possible Returns or Failures
Section titled “4. Possible Returns or Failures”Sometimes, a transaction appears successful but is rejected later (can be within a few days, or more).
Common reasons include:
- Insufficient funds
- Invalid account details
- Unauthorized transaction
Frequently Asked Questions
Section titled “Frequently Asked Questions”Can I cancel an ACH transaction?
Section titled “Can I cancel an ACH transaction?”Yes - but only if it hasn’t already been submitted to the bank (at next ACH cutoff time). After that, it must be refunded instead.
Why did my customer’s payment fail?
Section titled “Why did my customer’s payment fail?”The bank may have rejected the payment or there was a server error.
When will I receive the money?
Section titled “When will I receive the money?”ACH transfers typically settle within 1-2 business days after initiation.