Loan disbursement by EFT in Canada

What EFT Rails does

An advance is a credit you create through the API described in the API reference or in the dashboard's Virtual Terminal, as an electronic funds transfer (EFT) or by Interac e-Transfer where your account has it. For an EFT, you name the banking day or take the earliest, and a day that is too soon or is not a banking day is refused with the earliest that works. EFT Rails refuses a credit that exceeds your balance after subtracting payments already on their way out, and the refusal says "Insufficient funds" and gives the amount available. Your own reference, such as a loan number, comes back unchanged with the payment, along with a bank reference to quote.

Pick the day the advance lands

The Due Date is the date you put on the advance and, for a credit, the date the money is to reach the borrower's account.¹ It is the date to give the borrower when you schedule the payment.

Banks exchange EFT files three times each business day, at 09:30, 16:30 and 21:00 Eastern Time. A file submitted after 21:00 goes in the next business day's 09:30 exchange.² The EFT cutoff times determine which exchange can carry your file.

The borrower's branch determines how far ahead of the Due Date you send the advance. A credit to a branch that credits the same day goes on the Due Date or the business day before. A credit to a branch that needs one or two business days goes that many business days before the Due Date.³

When the borrower has the money

The borrower's bank must make the credit available on a deadline set by the branch's lead time and when the exchange delivered it. At a branch that credits the same day, availability is required within 2 hours of the exchange that brought the credit. At a branch that needs one or two business days, and when the credit arrived the business day before, availability is required by the opening of business on the Due Date. A credit to an account other than a chequing account may be treated as going to a one-day branch.⁴

For an advance the borrower needs on a given morning, set the Due Date to that day and send it the business day before. It is available by the opening of business. The banks then settle on the business day after the Due Date.⁵ See how long an EFT takes for the full timing sequence.

If an advance comes back

A rejected or returned advance requires correction or a new payment before you send the money again. A credit dated more than 30 calendar days before the file's creation date must be rejected.⁶ A rejected payment can only be sent again as a new payment.⁷

Return codes that can come back on a credit include 902 for an account not found, 905 for a closed account, 910 for a deceased payor or payee, 911 for a frozen account, 912 for an invalid or incorrect account number, 914 for an incorrect payor or payee name, and 922 when the customer returns the credit.⁸ The EFT return codes explain what these outcomes mean for the payment.

The borrower can refuse a credit up to and including 90 calendar days after it posted to their account.⁹ The API and dashboard show the payment's state, including returned and failed, so you can follow the advance after creation.

Fix a mistake

A sender can correct a duplicate advance, a wrong amount or a wrong account number no later than 3 business days after the settlement date.¹⁰

Before the first advance

Account checks and a second approval control where you send advances and who can change the destination. The API checks the borrower's account details before creating the payment: a three-digit institution number, a five-digit branch number and up to twelve digits of account number.

Changing a borrower's bank account on file requires approval by a second user. Approval limits per user are optional. To collect repayments, use a pre-authorized debit (PAD) and see collecting loan repayments by PAD.