Issuing an ACH Purchase

Overview

ACH Purchases allow you to issue an ACH payment to a Supplier in order to pay for goods or services. Our recommended path is to pay Suppliers via a Virtual Card due to risk protection and the ability to earn a rebate. However, some Suppliers will not accept a Virtual Card so we offer you the ability to pay Suppliers via ACH in those circumstances.

If you are looking for documentation about allowing your customers to pay you via ACH, please refer to our ACH Sales page for more information.

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Paying Suppliers via ACH does incur a fee whereas paying via Virtual Card returns a rebate. Please check your contract or talk to your Sales Rep about these specific ACH Purchase fees.

Developer Docs

IssueACH and IssueACHLite routes both accomplish the same result - they issue an ACH Purchase to a bank account. Most clients will integrate the IssueACH endpoint as the ACH Purchase is funded by one (or more) Consumer Sales.

IssueACHLite is a simpler endpoint to call when the ACH Purchase is funded by your Prefund Account vs being funded and tied to a Consumer Sale transaction.

For information on the IssueACH API Endpoints, see our developer docs here.

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You’ll notice the only difference between IssueACH and IssueACHLite is the “IncomingTransactionCode” is not required in the IssueACHLite request.

Daily Funding for ACH Purchases

Daily Funding (such as Residual Margin, Daily Margin, Adjustments, etc..), for the most part, works just like it does when issuing a Virtual Card.

Daily Margin - paid out when the Sale amount is greater than the amount of the ACH Purchase to the Supplier. For example, $100 Sale, $80 ACH Credit to Supplier = $20 in Daily Margin

Residual Margin - Residual Margin is only for Virtual Cards (when the amount settled is less than what it was issued for) so it does not apply to ACH Purchases

Adjustments - Adjustments occur if the ACH Purchase to the Supplier was rejected or returned. ConnexPay gives that money back to you via an Adjustment so you can settle up with the Supplier a different way or attempt another ACH Purchase (maybe with different/corrected DDA information).

ACH Purchase Timing

ACH transactions are all bulk processed once per banking day at 3:00 PM EST. When these transactions are processed, they are sent to the respective banks for further processing and will settle overnight.

The timing on when the Supplier will see the ACH Credit hit their bank account will depend on when their bank processes the ACH credit that was sent to the Fed for processing. Typically, the Supplier will see the credit the following business day if the ACH Purchase was made before 3:00 PM EST or two days after if processed after 3:00 PM EST.

Cancelling an ACH Purchase

If the ACH transaction hasn't been batch processed for the day yet, the purchase can be cancelled. Otherwise you will need to work with the supplier to recoup the funds.

When an ACH Purchase is Cancelled, the funds that were allocated for that Purchase will be given back to you as Daily Margin. Ex. $500 Sale, ACH Purchase of $450, then the $450 ACH Purchase is Cancelled, the full $500 would be given back as Daily Margin. In most scenarios, these funds will need to be given back to your customer (either via a Credit Card refund on the Sale, or via check, etc.).

ACH Purchase Rejects

When payments do not clear the supplier’s account, they are returned. Payments can be returned for a variety of reasons, including closed accounts, incorrect account numbers, etc. When an item is dishonored, the payment's status will update to 6 - Returned. A return could take up to 60 days to process (purchase returns are very rare).

FAQs

How long does it typically take for an ACH purchase transaction to complete?

Each banking day any pending ACH purchases are pulled for processing at 3:00 PM EST. During processing, transactions are quality controlled for data issues, and sent off to their respective banks which will credit the specified bank account. This will happen overnight at which point the transaction will have a status of ‘Processed’ and should be considered paid.

Is there a chance the purchase ACH transaction could be returned once it hits the ‘Processed’ status?

There is a slight risk it could be returned up to 60 days after it has been processed.
The status of returned payments will be updated to Returned and funds will be returned to you.

ConnexPay employees can find more information here.


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