Payments for lenders in Canada

What EFT Rails does

Send advances by electronic funds transfer (EFT) or Interac e-Transfer, and collect repayments by pre-authorized debit (PAD). A payment is one record with its state, expected settlement date and your own loan reference, returned to you untouched. Your loan system and operations team work from the same API reference and dashboard.

Sending an advance

You choose how an advance reaches the borrower and when it arrives: EFT or Interac e-Transfer, on the banking day you set or the earliest one. An e-Transfer to a borrower needs their email address.

The Due Date is the date you put on the payment: the date the money is to reach the borrower's account for an advance, or leave it for a repayment.¹

At a branch that credits the same day, an advance sent by EFT is exchanged on the Due Date or the business day before. If it arrives on the Due Date, the borrower's bank makes it available within 2 hours of the exchange that brought it. If it arrived the business day before, it is available by opening of business on the Due Date. At a branch that needs one or two business days, the advance is exchanged one or two business days earlier and is available by opening of business on the Due Date.²

The banks settle on the business day after the Due Date, or the business day after the exchange for a payment delivered late.³

Read Loan disbursement by EFT and EFT payments in Canada.

The guides

• Loan disbursement by EFT
• Collecting loan repayments by PAD
• Lender payouts and settlement timing
• Handling NSF returns
• PAD dispute windows

Collecting a repayment

You collect a repayment from the borrower's bank account under the authority they have given you. The repayment is a PAD drawn under the borrower's PAD agreement, a continuing authority the borrower signs or otherwise authorizes and can revoke.⁴

A loan or line-of-credit repayment is a Personal PAD.⁵

The repayment debit is not delivered to the borrower's bank before its Due Date.⁶

You hold the PAD agreement with the borrower and send them the notices.

Read Pre-authorized debits and Collecting loan repayments by PAD.

Using collected money

Keep collections with EFT Rails to fund new advances, or have them sent to your own bank account.

A settlement shows its period, what was collected, what went out on your instruction, the fees and the amount sent. Closed days remain available as statements that never change, ready for your accountant.

Read Lender payouts and settlement timing.

When a repayment comes back

A returned repayment moves to the returned state in the API and dashboard. Return reasons include 901 non-sufficient funds (NSF), 903 payment stopped or recalled, 905 account closed, 908 funds not cleared and 912 invalid or incorrect account number.⁷

A repayment returned for NSF (901) or funds not cleared (908) can be presented again once, within 30 calendar days of the return, for the same amount with nothing added.⁸

Separately from a return, a borrower can ask their own bank to reimburse a repayment that did not follow the agreement, came after the agreement was cancelled, or lacked a required notice. The window is 90 calendar days after the debit.⁹ You carry that risk on a collected repayment.

Read Handling NSF returns, PAD dispute windows and EFT returns and reconciliation.

Keeping your loan system in step

A payment moves through eight states your loan system can follow: created, awaiting approval, submitted, settled, returned, failed, cancelled and unknown.

Settled is not final for EFT because an EFT payment can come back after it settles. Unknown means the transmission failed and nobody can yet say whether the bank has the payment, so do not send a replacement. Failed means the payment definitely did not happen.

Your own reference, such as a loan number, travels with the payment and comes back untouched. The payment list answers what changed since a time you supply, so your loan system can request changes without checking each payment.

An e-Transfer a borrower sends on their own appears as an arrival with the message the borrower typed. Use that message to match the money to the loan.

Read EFT reconciliation and the API reference.

Controls

A borrower's first bank account takes effect at once. Changing where an existing borrower's money goes needs a second person to approve it.

Approval limits are optional and set per user. A payment above the approving person's limit waits for a second person. With no limits set, nothing waits.