Bank transfer workflow
Most bank transfers initiated within the Dwolla network are processed via the Automated Clearing House (ACH). We’ve reduced the complex nature of the ACH protocol down to several distinct statuses for transfers. Once a transfer is created it is recorded as an event (
transfer_created) and will be sent to you via a webhook (if subscribed). You will receive subsequent webhooks as the transfer follows the workflow outlined in this article. Webhooks will notify your application of a transfer status changes.
A normal ACH transfer workflow includes the following statuses:
- Pending: A transfer is initiated and starts off as “pending.” A transfer is pending when the money has yet to leave the funding source or it is en route to its destination.
- Processed: Once the ACH transfer has cleared successfully, it will be marked as “processed.” A processed transfer represents money that has reached its destination account—either a balance or bank account. For a balance, funds will become available to the recipient, while for a bank account, it may take additional time to become available, depending on your bank. Note: “processed” is not necessarily a final state. (See “failed” status below for additional context.)
Between the ACH transfer statuses of “pending” and “processed” there are three other transfer statuses which can occur: “cancelled”, “failed”, and “reclaimed.”
- Cancelled: If a transfer’s status changes from “pending” to “cancelled”, this means that the transfer was cancelled. A transfer can be cancelled by a Traditional CIP Verified account. See “Bank to Dwolla network” and “Dwolla network to bank” in the processing times section for available cancellation windows.
- Failed: If a transfer failed to clear successfully (usually as a result of an ACH reject or return), the transfer’s status will be “failed”. Transfers can fail for a number of reasons, e.g. insufficient funds, invalid account number, no account/unable to locate account, etc. Note: in rare cases, a “processed” transfer may later on get returned as “failed”.
- Reclaimed: If a transfer failed because the recipient did not claim the money after 30 days (or a custom reclaim period set by the sender), the transfer status will be marked as “reclaimed.” “Reclaimed” does not apply when transferring to Access API Customers.
Financial institutions play an important role in the Dwolla network.
Dwolla, Inc. is an agent of Veridian Credit Union and Compass Bank and all funds associated with your account in the Dwolla network are held in pooled accounts at Veridian Credit Union and Compass Bank. These funds are not eligible for individual insurance, including FDIC insurance and may not be eligible for share insurance by the National Credit Union Share Insurance Fund. Dwolla, Inc. is the operator of a software platform that communicates user instructions for funds transfers to Veridian Credit Union and Compass Bank.