ACH Fund Transfers
Highnote released ACH transfers v2 in August 2024. See the ACH Migration Guide to upgrade.
ACH transactions are routine, high-volume, low-cost payments between U.S. bank accounts on Nacha's Automated Clearing House (ACH) network. Unlike wire transfers, ACH transactions are processed in batches at scheduled intervals throughout the day, making them good for recurring payments, payroll, and situations where low cost matters more than speed.
Highnote organizes ACH transfer types by initiator. Originated transfers are initiated by Highnote; non-originated transfers are initiated by an external party.
| Type | Push/Pull | Credit/Debit | Description |
|---|---|---|---|
| Originated | Push | Credit | Highnote originates an ACH instruction to push funds from a Highnote financial account to an external bank account. |
| Pull | Debit | Highnote originates an ACH instruction to pull funds from an external bank account into a Highnote financial account. | |
| Non-originated | Push | Credit | An external bank initiates an ACH instruction on their platform to push funds from the external bank to a Highnote financial account. |
| Pull | Debit | An external bank initiates an ACH instruction on their platform to pull funds from a Highnote financial account. |
Highnote supports the following ACH transfer use cases:
| ACH Activity Type | Push/Pull | Credit/Debit | Direction |
|---|---|---|---|
| Originated | |||
| Fund Withdrawal | Push | Credit | Highnote account → External bank account |
| Fund Loading | Pull | Debit | Highnote account ← External bank account |
| Repayment | Pull | Debit | Highnote account ← External bank account |
| Non-originated | |||
| Direct Deposits | Push | Credit | Employer/Bank → Highnote account |
The status of an account determines whether and when ACH transfers can be made:
| Acount Status | ACH Transfer Eligibility | Debit / Prepaid | Credit |
|---|---|---|---|
ACTIVE | All transfer types supported | Yes | Yes |
SUSPENDED | Limited transfer capabilities, case-by-case basis | No | Yes |
UNDER_REVIEW | Restricted transfers pending investigation | No | Yes |
PENDING_CLOSURE | No new scheduled transfers, existing transfers may complete | No | Yes |
CLOSED | No transfers permitted | No | No |
Below are example flows for each combination of push/pull and credit/debit, grouped by initiator or originator.
Highnote as initiator
| Push/Pull | Credit/Debit | Example Scenario |
|---|---|---|
| Push | Credit | A cardholder requests a refund for a returned purchase, and Highnote sends the funds from their Product Funding Account to the cardholder's external checking account. |
| Push | Debit | A business using Highnote schedules a monthly rent payment, and Highnote debits the business account to pay the landlord's external bank account. |
| Pull | Credit | A cardholder uses a third-party app (such as Plaid) to link their external bank account and initiates a transfer to load funds onto their prepaid card issued by a Highnote subscriber. |
| Pull | Debit | A Highnote credit cardholder sets up autopay, and Highnote automatically pulls the monthly payment from the cardholder's external checking account. |
External party as initiator
| Push/Pull | Credit/Debit | Example Scenario |
|---|---|---|
| Push | Credit | An employer runs payroll and sends an employee's paycheck via direct deposit to the employee's Highnote Payroll Account. |
| Push | Debit | A customer pays for an online order, and the merchant's bank debits the merchant's account to send funds to the Highnote business account. |
| Pull | Credit | A loan servicer is authorized to pull a monthly payment from a borrower's Highnote account, crediting the servicer's external account. |
| Pull | Debit | A utility company is authorized to automatically withdraw a monthly payment from a Highnote account to pay the customer's electric bill. |