EFT reject vs return in Canada
A rejected payment never reached the account, and a corrected one goes as a new payment. A returned payment reached the account and is coming back.
Updated November 3, 2026
What EFT Rails does
EFT Rails shows what happened to an electronic funds transfer (EFT) payment, so you can correct it, reconcile it or wait for its outcome.
A payment the bank rejected shows as failed in the API and as rejected in the dashboard: it did not happen, and a corrected payment is a new one you create. A returned payment shows as returned in the API and in the dashboard. When EFT Rails cannot tell whether the bank has a payment, it shows as unknown in the API and as "Failed (outcome pending)" in the dashboard. Do not create a replacement while it is in that state because it may still go through.
Your system can ask for only the payments that changed since its last check. The API reference documents the payment endpoints and states.
A rejected file
A rejected file is a whole submission the receiving bank could not process, so nothing in it settles.1
The receiving bank rejects a file it cannot read. It also rejects a file with a missing header or trailer record, totals that do not balance, an invalid field, record types that cannot be mixed, or an originating bank in default. The receiving bank can stop checking at the first fault it finds.2
The receiving bank checks every file on arrival. If it cannot process the file, it tells the sending bank promptly and gives the file's creation number, creation date and the reason for rejection. For the first two daily exchanges, notice is due no later than 1 hour after the exchange deadline. For the third exchange, notice is due before the next day's first exchange deadline.3
A file that cannot be sent again in the same exchange can go in a later one.3 Correct the reported fault before sending it again. Use the file format guide to check the records and the file creation number guide to identify the rejected file.
A rejected payment
A rejected payment is a single payment that failed the receiving bank's checks and did not reach the account. The receiving bank sends it back no later than the business day after the file was checked. It carries code 900 and names the field in error. Code 900 applies only to payments rejected for these check failures.4
A credit dated more than 30 calendar days before the file's creation date must be rejected. A debit dated more than 173 calendar days before that date can be rejected.5
Rejected payments do settle between the banks, even though the payment did not happen for you.1 This distinguishes them from a rejected file, whose contents do not settle.
A rejected payment can be sent again only as a new payment.6 Correct the named field and create that payment. In EFT Rails, the original remains failed in the API and rejected in the dashboard.
A returned payment
A returned payment passed the receiving bank's checks but was later not posted, dishonoured or refused. It comes back with the return code that applies to the reason.7
The customer's bank returns it no later than the business day after the part of the bank able to make the decision receives it. A customer's claim-back of a debit follows separate time limits. A payee can refuse a credit up to and including 90 calendar days after it posted.8
Only a debit returned for non-sufficient funds (NSF), code 901, or funds not cleared, code 908, can be presented again. It can be presented once within 30 calendar days.9
Use the return code guide to identify the reason and handling NSF returns for the next step on an eligible debit. EFT Rails shows the payment as returned in the API and in the dashboard.
Telling them apart
| Case | What happened | When you hear | Did it settle? | What to do |
|---|---|---|---|---|
| Rejected file | The receiving bank could not process the whole file. | Within 1 hour after the deadline for the first two exchanges, or before the next day's first exchange deadline for the third.3 | No. Nothing in the file settles.1 | Correct the file and send it again in the same exchange or a later one. |
| Rejected payment | One payment failed the receiving bank's checks and did not reach the account. | No later than the business day after the file was checked.4 | Yes, between the banks.1 | Correct the error and create a new payment. |
| Returned payment | The payment passed the checks but was later not posted, dishonoured or refused. | No later than the business day after the part of the customer's bank able to decide receives it. The separate claim-back and credit-refusal limits still apply.8 | It reached the account and is coming back. | Act on the return code. Re-present only an eligible NSF or funds-not-cleared debit, once within 30 calendar days.9 |
There is also a fourth case: the outcome is not yet known. EFT Rails shows the payment as unknown in the API and as "Failed (outcome pending)" in the dashboard. Wait while it is in that state, because the payment may still go through and a replacement could duplicate it.
Sources (9)
- Rule F1, Part V, "Settlement" ↩
- Standard 005, Section D, paragraph 4 ↩
- Rule F1, Part II, "AFT Initial File Edit and Rejected Files" ↩
- Rule F1, Part II, "Transaction Edit, Account Validation and Rejected Transactions"; Standard 007, paragraph 5 ↩
- Rule F1, Part II, "Transaction Edit, Account Validation and Rejected Transactions" ↩
- Rule F1, Part II, "Resubmission of Rejected Transactions" ↩
- Rule F1, Part III, "Unposted/Dishonoured Transactions/Transactions Refused by Payor/Payee" ↩
- Rule F1, Part III, "Time Limitation for Return"; Rule F1, Part III, "Exceptions to Time Limitation: Payor/Payee Initiated Returns" ↩
- Rule F1, Part III, "Re-presentment and Rejected Returned Transactions" ↩
Questions
What is the difference between a rejected and a returned EFT?
A rejected payment failed the receiving bank's checks and did not reach the account.1 A returned payment passed those checks but was later not posted, dishonoured or refused, and it comes back with a return code.2
Does a rejected payment settle?
Yes. A rejected payment settles between the banks even though it did not happen for you. A rejected file is different: nothing in that file settles.3
Can I resend a rejected payment?
You can send it again only as a new payment.4 Correct the field in error and create the new payment; the original remains failed in the API and rejected in the dashboard.
What does return code 900 mean?
Code 900 means the receiving bank rejected the payment during its checks. The rejected payment also names the field in error and comes back no later than the business day after the file was checked.1