What are the risks associated with faster payments (e.g. Next Day ACH, Same Day ACH, Real-time Payments)?

What are the risks associated with faster payments (e.g. Next Day ACH, Same Day ACH, Real-time Payments)?

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Title
What are the risks associated with faster payments (e.g. Next Day ACH, Same Day ACH, Real-time Payments)?

Summary
When you utilize standard ACH transaction timing, there is a 3-4 day window to ensure adequate time for most administrative return codes to be received. Next Day ACH and Same Day ACH make funds liquid and available sooner than most administrative return codes can be received by Dwolla.

By reducing the time for transactions to be processed without a return code being issued, there is an associated risk that the debit portion of a transaction will be returned (for example, due to R01/insufficient funds) after a transaction has completed to a destination receiver. If funds have been withdrawn from the Dwolla network and a return code is issued for that particular transaction, a negative balance for an end user or primary account can occur. Most administrative returns for ACH transactions are received within two banking days after a transaction has been initiated, but some returns can take up to 60 days, specifically related to unauthorized returns.

Your company is responsible for evaluating your own customer base, payment flows and risk appetite to limit your application's exposure to the general risks associated with ACH payments and expedited payment options.

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