Hold times for debit transactions are part of a customer’s configuration that are determined at onboarding. While speed of settlement can be a differentiator, the faster the settlement, the higher the risk. Many factors are taken into consideration when assigning hold times and when calculating the amount of collateral required to process debit transactions with Orum.

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ACH

Orum processes ACH on all available Fed windows.

  • Same Day ACH has a cutoff of 4:30pm ET
  • Standard ACH has a cutoff of 11:50pm ET

The standard hold time that we apply to all ACH debits is two banking days from the effective entry date.

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Differences Between Same Day ACH & Stand ACH Hold Times

Same Day ACH 

  • Has an effective entry date of the day it is submitted.
  • Funds will move between the ODFI (Orum’s Bank) and RDFI (the bank being debited) on that day but that does not mean that funds are made available to you on Orum’s platform on that day. 
  • The hold time clock starts on the same day the transfer is requested (effective entry date) and the following banking day is considered the second day of the hold period. 
  • The morning of the 3rd banking day the funds will settle and move from your pending balance to your available balance.

Example Timelines

A2A

1

Monday

  • Same Day ACH debit submitted at 10:00am ET
  • Hold time begins
2

Tuesday

  • Hold time continues
3

Wednesday

  • Funds Settle at 9:30am ET
  • Credit is initiated at 12:00pm ET
  • Funds post in the destination account by the end of the day

Deposits

1

Monday

  • Same Day ACH debit submitted at 10:00am ET
  • Hold time begins
2

Tuesday

  • Hold time continues
3

Wednesday

  • Funds settle at 9:30am ET

Standard ACH

  • Has an effective entry date of the next banking day after it is submitted. 
  • Funds will move between the ODFI (Orum’s Bank) and RDFI (the bank being debited) on the next banking day but that does not mean that funds are made available to you on Orum’s platform on that day. 
  • The hold time clock starts one banking day later than the date of submission(effective entry date) and the following banking day is considered the first day of the hold period.
  • The morning of the 3rd banking day the funds will settle and move from you pending to your available balance.

Example Timelines

A2A

1

Monday

  • Standard ACH debit submitted at 5:00pm ET
2

Tuesday

  • Hold time begins
3

Wednesday

  • Hold time continues
4

Thursday

  • Funds settle at 9:30am ET
  • Credit initiated at 12:00pm ET
5

Friday

  • Funds post in the destination account in the morning

Deposits

1

Monday

  • Standard ACH debit submitted at 5:00pm ET
2

Tuesday

  • Hold time begins
3

Wednesday

  • Hold time continues
4

Thursday

  • Funds settle at 9:30am ET

You may hear things like “Instant” ACH or “Next Day” ACH but the only difference between a Same Day ACH and a Standard ACH is the effective entry date.

This is key because it sets the timeline for when an RDFI must submit a return on any transaction based on the Nacha rules. The majority of returns happen within two banking days but certain returns can happen much later.

Details on ACH returns and their timelines can be found in our Returns & Chargebacks guide.  

Shorter or longer hold times may be assigned based on the following factors for your business:

  • ACH debit volume
  • ACH origination history
  • ACH return rates
  • Average transaction size
  • Product and industry risk
  • Company financial strength  

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Cards

When pulling funds from a user’s card, settlement is significantly more straightforward than with ACH. Card transactions include an upfront authorization step that confirms sufficient funds and account validity before the transaction is processed. While there is still a risk of chargebacks due to user disputes, card transactions avoid the common ACH return scenarios such as insufficient funds, invalid account numbers, or closed accounts. 

Card payments do not invovle the same waiting periods as ACH and settlement is more preditable compared to the delayed return windows associated with ACH debits.

For Account Funding transactions (AFT), funds are typically made available the afternoon of the banking day following the end of the processing window at 1:00pm ET. Depending on the card type and the timing of the transaction, this may result in same-day (T+0) or next-day (T+1) settlement.

Note that while the users external account is debited in real time, funds do not settle on weekends for AFT transactions.

Settlement timing may be extended for customers with elevated chargeback rates or other risk factors. In such cases, Orum may apply longer hold periods and delayed settlement configurations to mitigate risk.

It’s important to note that Visa and Mastercard operate on different processing schedules and have different cutoff times. As a result, the exact timing of settlement is influenced by:

  • Card network used
  • Transaction time
  • Applicable hold configurations

Example Timelines

Example 1

1

Monday

  • Visa or Mastercard AFT/Pull transaction submitted at 1:00pm ET
2

Tuesday

  • Funds settle at 1pm ET

Example 2

1

Tuesday

  • Visa AFT/Pull transaction submitted at 5:00am ET (before Visa cutoff)
  • Funds settle at 1:00pm ET

Example 3

1

Tuesday

  • Mastercard AFT/Pull transaction submitted at 5:00am ET (after Mastercard cutoff)
2

Wednesday

  • Funds settle at 1:00pm ET

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