> For clean Markdown of any page, append .md to the page URL. > For a complete documentation index, see https://beta-docs.payabli.com/guides/ach-process/llms.txt. > For AI client integration (Claude Code, Cursor, etc.), connect to the MCP server at https://beta-docs.payabli.com/_mcp/server. # ACH payments cycle The Automated Clearing House (ACH) is a system for transferring electronic funds, run by [Nacha](https://www.nacha.org/). This guide covers the basics of the ACH payments cycle and timing. ## ACH terms Familiarize yourself with the basic entities involved in a Pay In ACH transaction. * **Initiator**: The initiator is a company or person who begins the ACH transaction process. In Payabli's Pay In functions, the initiator is always a paypoint or the paypoint's customer. ACH transactions must be authorized by the person or company being debited, either as part of the transaction or in advance of the transaction. * **Third Party Sender** - This is Payabli's designation with the banking networks that allows us to manage transactions. * **ODFI**: The Originating Depository Financial Institution (ODFI) is a bank that accepts ACH transactions on behalf of the initiator. This is one of Payabli's bank partners who manages our connection with the ACH network. * **RDFI**: The Receiving Depository Financial Institution (RDFI) is the bank that receives the request. These requests are typically a payment from a customer to a merchant, a settlement to a paypoint from an organization, or a settlement to a vendor from a paypoint. * **ACH Operator**: The ACH operator receives entries from ODFIs, distributes them to RDFIs, and settles the transactions. ## The ACH process Here's an overview of the basic ACH process for a Pay In transaction: ![](/_fern-files/beta-docs.payabli.com/9d72d701bdda0f12d3e6cc5e628c1992adffa47291c88b0d8fe92b23b41ed09a/images/generated-diagrams/ach-pay-in-process.svg) #### Initiation Someone initiates the transaction, this could be a customer "crediting" a paypoint or a paypoint "debiting" a customer. #### Payabli communicates request Payabli (the Third Party Sender) communicates the request for funds to the ODFI. #### ODFI processing The ODFI receives the request and passes the request to the ACH operator for processing. The ODFI is one of Payabli's partner banks. #### ACH operator processing The ACH operator processes the incoming and outgoing requests for many financial institutions and sends them to the recipient bank (RDFI). #### RDFI processing The recipient bank (RDFI) receives the request and begins processing. 1. The request may fail for various reasons, such as insufficient funds or invalid banking information. 2. If the funds for the transaction are available in account, they're withdrawn and a line item appears in the customer's bank statement. #### RDFI response The RDFI responds back through the ACH network with the funds or reject message. #### ACH operator response The ACH operator sends the message to the ODFI. #### ODFI completion The ODFI processes the message and credits the paypoint with the funds as requested. If the payment rejected, no funds will be passed and the paypoint may incur a fee for erroneously debiting an account. #### Settlement Payabli settles and transfers the funds to the paypoint. ## ACH processing times The ACH network settles payments only when the Federal Reserve's settlement service is open. The Federal Reserve's settlement system operates on banking days from 7:30 AM to 6:30 PM Eastern Time, excluding weekends and federal holidays. Here are some key terms used when discussing processing timelines:
Term Definition
Transaction time The time the transaction occurred.
Transaction day The calendar day when the transaction occurred.
Batch day The day's batch that the transaction is on for processing. Transactions made after the batch cutoff go on the next day's batch.
Review days Also known as "hold days", this is the number of days that the funds are held for review and monitoring.
Transfer day The calendar day when the instruction to send money is initiated. This can be any day of the week, including weekends and holidays. The transfer Day is calculated by adding review days to the batch day.
Fund day The day when Payabli receives confirmation from ODFI that the funds are on their way through the ACH system. This only occurs on banking days.
> **Note** > > Important notes about fund day: > > * Treat the fund date as a confirmation that ODFI has sent the funding instruction to the ACH Operator and the money is on its way. > * Fund date isn't a guarantee that merchants have already received the money in their bank account. The amount of time it takes to move the funds between ACH Operator and the RDFI varies, depending who the RDFI is. For most banks and financial institutes the fund day is when the money appears as "Pending" or "Processing" in the merchant's bank account. > * ACH returns can happen after the fund day. ### Timeline examples with 0 review days This table gives several examples of ACH processing timelines with a 0 day review period. | Transaction day | Batch day | Transfer day | Fund day | Notes | | :-------------- | :-------- | :----------- | :------- | :----------------------- | | Mon | Mon | Mon | Tue | Regular Week | | Fri | Fri | Fri | Mon | No processing on weekend | | Sat | Sat | Sat | Mon | No processing on weekend | | Sun | Sun | Sun | Mon | No processing on weekend | | Fri | Fri | Fri | Tue | Monday is a bank holiday | | Sun | Sun | Sun | Tue | Monday is a bank holiday | ### Timeline examples with 2 review days This table gives several examples of ACH processing timelines with a 2 day review period. | Transaction day | Batch day | Transfer day | Fund day | Notes | | :-------------- | :-------- | :----------- | :------- | :----------------------- | | Mon | Mon | Wed | Thu | Regular week | | Wed | Wed | Fri | Mon | No processing on weekend | | Fri | Fri | Sun | Mon | No processing on weekend | | Sat | Sat | Mon | Tue | Regular week | | Sun | Sun | Tue | Wed | Regular week | | Wed | Wed | Fri | Tue | Monday is a bank holiday | | Fri | Fri | Sun | Tue | Monday is a bank holiday | > **Info** > > Although the fund day is typically the next banking day after the transfer day, it can take longer. It may take longer during high-volume periods, when the ODFI, ACH Operator, or RDFI experiences delays, or extended holidays. Check with your financial institution for the most up-to-date information about a specific transaction. > If you have specific funding schedule expectations, reach out to Payabli to discuss. ## ACH returns An ACH return is a message from the check writer's bank that lets the ODFI (Originating Depository Financial Institution) know the ACH Network couldn't make the deposit or collect funds from the receiver's account (RDFI- Receiving Depository Financial Institution). Learn more in the [ACH Returns](/guides/chargebacks-and-returns#ach-returns) guide. > If you're a software company, you're a payments company™