Managing Failed Payouts

Learn how to manage payouts that get returned.

Failed Payouts Overview

There are several reasons why payouts (also known as Funding Transfers) can fail and return to you. The most common reason is that the Seller's payout bank account information is incorrect.

When Funding Transfers fail, Finix will mark them as failed and tag them with the ACH Return Reason Code. You may need to reach out to your seller to update bank account information.

Resending a Failed Funding Transfer using the Dashboard

If a payout to a merchant's bank account does not go through, you can resend the failed funding transfer using the Finix dashboard after the Merchant has updated their bank account information.

To resend a failed funding transfer using the dashboard:

1. From the Merchant Account page, click Payouts, then Settlements.
2. Click a settlement from the list of settlements to view its details.
3. Scroll down to Settlement Deposits to see a list of all settlement funding transfers.
4. A failed settlement funding transfer is in a Failed state.
5. You can resend the transfer by clicking the Re-send Transfer button.
   • A Resend Funding Transfer Instructions modal displays.
6. From the modal, select a Payment Instrument.
   • If successful, a new settlement funding transfer displays in the list with a state of SUCCEEDED.

Resending a Failed Funding Transfer using the API

To resend a failed settlement funding transfer, send a request to the PUT /settlements/{settlement_id}, including the destination (merchant's bank account) and rail (always ACH) in the request body:

Example

curl -i -X PUT \
  -u USrsBRw5q8f8ZcuWvrWsZro1:c00462f6-251c-47a7-aa12-31d7e7b4fa8c \
  https://finix.sandbox-payments-api.com/settlements/STcuLDR3uAhut6DBAnDSB2a \
  -H 'Content-Type: application/json' \
  -H 'Finix-Version: 2022-02-01' \
  -d '{\n        "destination": "PIeuV9AEb5hFxSzVLDqiGdne",\n        "rail": "ACH"\n     }'

API Definition To confirm if the retry was successful, list the settlement funding transfers and look for a new Transfer marked as CREDIT with the same details and amount as the failed transfer.

Automatically Retrying Failed Funding Transfers

If a funding transfer fails, Finix disables the merchant's settlements and automatically retries the funding transfer according to the following schedule:

• First retry: 1 business day after the initial failure
• Second retry: 3 business days after the first retry fails
• If both retries fail, Finix debits the platform bank account on file

If the platform debit also fails, the outstanding balance is applied as a deduction to the platform's next residual payout.

To identify which merchant accounts are driving failed debits, navigate to Merchants > Merchant Payouts > Merchant Deposits in the Dashboard and filter by Failed.

Funding Transfer Resource

You can fetch Funding Transfers from the /transfers endpoint. Funding Transfers get processed on the ACH rails and behave similarly to ACH payments (also known as eChecks).

Failed Funding Transfer
{
    "id": "TRxxxxxx",
    "amount": 500,
    "tags": {},
    "state": "FAILED",
    "trace_id": "FNXxxxxxx",
    "currency": "USD",
    "application": "APxxxxxx",
    "source": null,
    "destination": "PIxxxxx",
    "ready_to_settle_at": null,
    "fee": 0,
    "statement_descriptor": null,
    "type": "CREDIT",
    "messages": [
        "ReasonCode: R03",
        "ReasonDescription: No Account/Unable to Locate Account",
        "Declined because there is a record in FAILED_FUNDS for 'FNXxxxxxxx' transfer"
    ],
    "raw": {
        "Return Date": "xx/xx/2019",
        "Original Date": "xx/xx/2019",
        "Attempted Funds Transfer Date": "xx/xx/2019",
        "Merchant Name": "xxx xxxx xxxx xxx",
        "Sub Merchant Business Name": "xxx xxx xxx",
        "Funding Sub Merchant ID": "0xxxxxx",
        "Funds Transfer Request ID": "FNXxxxxx",
        "Vantiv Payment ID": "xxxxx",
        "Txn Type": "FISC",
        "Funds Transfer Amount": 500.0,
        "Reason Code": "R03",
        "Reason Message": "No Account/Unable to Locate Account",
        "Routing Number": "xxxxx",
        "Account Number": "XXxxxxx",
        "Account Name": "xxx xxx xxx"
    },
    "created_at": "xxxx",
    "updated_at": "xxxx",
    "idempotency_id": null,
    "merchant": "MUxxxxx",
    "merchant_identity": "IDxxxxx",
    "subtype": "SETTLEMENT_MERCHANT",
    "_links": {
        "application": {
            "href": "https://finix.sandbox-payments-api.com/applications/APxxxxxx"
        },
        "self": {
            "href": "https://finix.sandbox-payments-api.com/transfers/TRxxxxxx"
        },
        "merchant_identity": {
            "href": "https://finix.sandbox-payments-api.com/identities/IDxxxxx"
        },
        "payment_instruments": {
            "href": "https://finix.sandbox-payments-api.com/transfers/TRxxxxxx/payment_instruments"
        },
        "reversals": {
            "href": "https://finix.sandbox-payments-api.com/transfers/TRxxxxxx/reversals"
        },
        "fees": {
            "href": "https://finix.sandbox-payments-api.com/transfers/TRxxxxxx/fees"
        },
        "disputes": {
            "href": "https://finix.sandbox-payments-api.com/transfers/TRxxxxxx/disputes"
        },
        "source": {
            "href": "https://finix.sandbox-payments-api.com/payment_instruments/PIxxxxx"
        },
        "fee_profile": {
            "href": "https://finix.sandbox-payments-api.com/fee_profiles/FPvCQUcnsueN3Bc3zR1qCBG8"
        }
    }
}

Resolving Funding Instruction Failures

Failed funding transfers will receive these ACH Return Reason Codes in the Transfer's messages array.

• If you haven't shipped the goods or provided the services covered by the payment, we recommend waiting to do so until you have confirmed the funding instructions transfer has settled. | R03 | No Account / Unable to Locate Account | The account number structure is valid, and it passes the check digit validation, but the account number does not correspond to the individual identified in the entry, or the account number designated is not an open account. | - Reach out to your user and confirm the Routing Number, Bank Account Number, and the exact name on the bank account. You can request a copy of a voided check to use for verification.
• If this information does not exactly match what you initially entered, create a new Payment Instrument with the needed changes and submit the Funding Instructions again. | R04 | Invalid Account Number | The account number structure is not valid. The account number may have failed the check digit validation or has the wrong number of digits. | - Reach out to the user and request the correct bank account number. Request a copy of a voided check to verify the bank account number provided.
• Create a new Payment Instrument with the correct bank account number and submit the Funding Instructions again. | R05 | Unauthorized Debit Entry | The account number structure isn't valid. The account number may have failed the check digit validation or has the wrong number of digits. | - Don't re-submit the funding instruction to the same Payment Instrument. Any additional attempts will get returned unless your customer explicitly instructs their bank to accept them.
• Reach out to the user and resolve any issues that caused the transaction to get disputed.
• You can ask the user for another form of payment or a different bank account.
• If you need to debit the same bank account, ask the user to call their bank and remove the block on transactions.
• Unfortunately, there is no dispute resolution available within the ACH Network. If your customer continues to claim the transaction was not authorized, but you have proof that it was authorized correctly, please reach out to your Finix point of contact. | R06 | Returned per ODFI’s Request | The ODFI (Originating Depository Financial Institution) has requested that the RDFI (Receiving Depository Financial Institution) return the ACH entry. If the RDFI agrees to return the entry, the ODFI must indemnify the RDFI according to Article Five (Return, Adjustment, Correction, and Acknowledgment of Entries and Entry Information) of the ACH Rules. | - Reach out to your Finix point of contact. | R07 | Authorization Revoked by Customer (adjustment entries) | Authorization Revoked by Customer – Consumer, who previously authorized ACH payment, has revoked authorization from the Originator (must be returned no later than 60 days from the settlement date, and the customer must sign an affidavit). | - Immediately suspend any recurring payments entered for this bank account/Payment Instrument. This prevents additional transactions from being returned while you address the issue with the user.
• Reach out to your user and resolve any issues that caused the funding instructions to get disputed.
• You can ask the user for another form of payment or a different bank account.
• If you need to debit the same bank account, instruct the user to call their bank and remove the block on transactions.
• Unfortunately, there is no dispute resolution available within the ACH Network. If your customer continues to claim the transaction was not authorized, but you have proof that it was authorized correctly, please reach out to your Finix point of contact. | R08 | Payment Stopped or Stop Payment on Item | The Receiver of a recurring debit transaction has the right to stop payment on any specific ACH debit. The RDFI should verify the Receiver’s intent when a request to stop payment gets made to verify the request isn't intended to be a revocation of the authorization. | - Reach out to your user and resolve any issues that caused the funding instructions to stop.
• You can try re-submitting the funding instructions again once you have proper authorization from the user. Alternatively, you can request another or different form of payment. | R09 | Uncollected Funds | A sufficient book or ledger balance exists to satisfy the dollar value of the transaction, but the dollar value of transactions in the process of collection (i.e., uncollected checks) brings the available and/or cash reserve balance below the dollar value of the debit entry. | - Try submitting the funding instructions again. You can try up to two more times within 30 days of the original authorization date. | R10 | Customer Advises Not Authorized; Item Is Ineligible, Notice Not Provided, Signatures Not Genuine, or Item Altered (adjustment entries) | For entries to Consumer Accounts that are not PPD debit entries constituting notice of presentment or PPD Accounts Receivable Truncated Check Debit Entries in accordance with Article Two, subsection 2.1.4(2), the RDFI has been notified by its customer, the Receiver, that the Originator of a given transaction has not been authorized to debit his account. | - Immediately suspend any recurring payments for this bank account/Payment Instrument. This prevents additional transactions from being returned while you address the issue with the user.
• Reach out to your user and resolve any issues that caused the funding instructions to get disputed or canceled.
• You can ask the user for another form of payment or a different bank account.
• If you need to debit the same bank account, instruct your user to call their bank and remove the block on transactions.
• Unfortunately, there is no dispute resolution available within the ACH Network. If your customer continues to claim the transaction was not authorized, but you have proof that it was authorized correctly, please reach out to your Finix point of contact. | R11 | Customer Advises Entry Not in Accordance with the Terms of the Authorization | Used by the RDFI to return an entry for which the Originator and Receiver have a relationship, and an authorization to debit exists, but there is an error or defect in the payment such that the entry does not conform to the terms of the authorization. | - Reach out to your user and resolve any issues that caused the funding instructions to get disputed or canceled. You’ll need to submit the funding instructions again. | R12 | Branch Sold to Another DFI | A financial institution may continue to receive entries destined for an account at a branch that has been sold to another financial institution. | - Reach out to the user and obtain a new Routing Number and Bank Account Number. Create a new Payment Instrument with the information and submit the funding instructions again to this new instrument. | R13 | RDFI not qualified to participate | Financial institutions are not qualified to participate in ACH, or the routing number is incorrect. | - Verify the Routing Number is correct. If necessary, reach out to the user to verify bank information. You’ll need to submit the funding instructions again. | R14 | Representative Payee Deceased or Unable to Continue in that Capacity | The representative payee is a person or institution authorized to accept entries on behalf of one or more other persons, such as legally incapacitated adults or minor children. | - Reach out to the user and request another form of payment. | R15 | Beneficiary or Account Holder (Other Than a Representative Payee) Deceased | (1) The beneficiary is the person entitled to the benefits and is deceased. | - Reach out to the user and obtain a new Routing Number and Bank Account Number. Create a new Payment Instrument and submit the funding instructions again to this new instrument. | R16 | Account Frozen | The funds in the account are unavailable due to specific action taken by the RDFI or by legal action. | - Reach out to the user and request a different form of payment. You won't be able to process any transactions using this bank account until it is un-frozen. | R17 | File Record Edit Criteria (Specify) | Some fields that are not edited by the ACH Operator are edited by the RDFI. | - Verify the Routing and Account Number are correct. If necessary, reach out to the user to verify bank information. If the information is correct, request a different form of payment. You’ll need to submit the funding instructions again. | R20 | Non-Transaction Account | The ACH entry is destined for a non-transaction account. | - Contact your user for another form of payment or a different bank account. | R23 | Credit Entry Refused by Receiver | The Receiver may return a credit entry for various conditions. | - Reach out to the user and resolve any issues that could have caused the transaction to be stopped or refused. | R29 | Corporate Customer Advises Not Authorized | The RDFI has been notified by the Receiver (non-consumer) that the Originator of a given transaction has not been authorized to debit the Receiver’s account. | - Immediately suspend any recurring payments scheduled for this bank account/Payment Instrument. This prevents additional transactions from being returned while you address the issue with the user.

Notification of Change (NOC)

A Notification of Change (NOC) is a notice sent from a customer’s bank detailing the information that changed in a transaction to allow it to be successful.

For example, if you paid out one of your merchants, and they accidentally put the wrong routing number or bank account number. Instead of the transaction failing, a NOC gets generated as the bank successfully delivers the payout to the merchant.

The NOC informs the Payment Facilitator of what occurred and provides the necessary information to rectify the issue. When a NOC of change happens, depending on the changes made, you may receive a Payment Instrument updated webhook event as Finix complies with NOC laws from NACHA.