Processing Of Bank Account Transfers

Bank account transfers are often used by modern businesses, so they are looking for payment gateway providers which offer this functionality. But if you want to add this feature to your processing system you need to be aware of the peculiarities of processing of bank account transfers in different countries. Two types of systems exist, namely, one-phase systems and two-phase systems.

One phase systems are used in the USA and Canada. In this case merchant sends the file with transactions which should be processed to the clearing house. Then the clearing house within several days provides the merchant with requested funds. And after that transmits the transaction information to the respective banks for approval. (If transaction is declined, money is automatically withdrawn from the merchant’s bank account).

Two-phase systems are a common practice for the UK, EU and Australia. Generally the process is the same. Payments are processed through the clearing house like in the one-phase system, but before getting an opportunity to process transactions merchants need to register bank accounts (they are planning to process payments through) within the system.

The diagram below explains how bank account transfers are processed in one and two-phase systems. Those who are interested in the additional information on this issue can read articles at #UniPayGateway and #Paylosophy.

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