A transaction is the overall process of withdrawing money from one entities bank account and depositing it into another
entities bank account. The entity sending the money is referred to as the payor and the entity receiving the money is
referred to as the payee.
A successful transaction consists of two parts, the capture and the payout. Depending on how your system is configured, more than one transaction can exist within a single payout, this is referred to as a batch payout.A transaction can contain other sub-operations that are used to track independent activities such as clawbacks and reverse-payouts.
When a transaction is created using the Transaction API, money is
debited from the payor’s bank account to our FBO account. Once the money clears, it is then credited directly to the
payee’s bank account or, in the case of a batch payout, included in a batch deposit to the Processor FBO account and
then in turn paid out to the individual merchants.
The timing of the transaction payout depends on a few factors which can cause a delay on either the capture or payout operations:
Weekends: banks do not process ACH payments on weekends.
Bank Holidays: banks do not process ACH payments on bank holidays.
Timing: a next day transaction created after 5:30pm EST will not be processed until the following day which adds an
extra day to the payout.
Risk: if a transaction triggers certain rules that determine it to be a higher than normal risk, the payout may be
delayed by a number of days to minimize the risk of a return.
During a chargeback, also known as a return, a payor can contact the bank and have them issue a chargeback which will
take the money back from the FBO account and return it to the payor. This in turn will trigger the ACH API to do
a clawback of the funds sent to the payee, or in the case of a batch payout, a clawback from the Processor FBO account
and then in turn, the processor will clawback from the payee.Something to keep in mind:
If the payor is a business, they have up to two calendar days to request a chargeback.
If the payor is a person, they have up to 60 calendar days to request a chargeback.
Batch Payouts are when a processor is configured to receive a single daily batch payment that includes all transactions
processed the previous day, with the processor in turn sending out individual or batch payments to the payees.