How Money Moves
Learn how transactions, batches, and transfers work together in Payabli to move money
When working with Payabli, whether with Pay In or Pay Out functions, you will see the terms transaction, batch, and transfer used frequently. This conceptual guide walks through the basics of what these terms mean in Payabli, and how they work together to move money.
Processing overview
Before we dive into the definitions for transactions, batches, and transfers, let’s look at a high-level overview for how Payabli processes transactions.
Money in processing
First, a customer makes a payment using a payment method. If this transaction occurs before the batch cutoff time of 5 PM Eastern, the transaction gets grouped together with other transactions for the same day. If the transaction happens after the cutoff, it goes on the next day’s batch.
The batch is closed and then Payabli starts the transfer process, which settles the transactions and moves the net proceeds into the merchant’s designated bank accounts automatically.
Transaction
A customer makes a payment using a chosen payment method.
Batch
The transaction is batched, and the batch is closed.
Transfer
The transactions are settled and net proceeds are moved to the merchant’s bank account.
You can see a detailed money in transaction flow in this transaction lifecycle example.
Money out processing
First, a paypoint creates a payout transaction to pay a vendor. There may or may not be a bill attached to the request. The rest of the money out process happens automatically. The payout transaction is batched with other payout transactions. Unlike the money in process where transactions are settled during the transfer, payout transactions are settled in the batch.
When the batch status is Funded, the money has been received from the funding entity, which is typically the paypoint (merchant). After a batch is funded, the payouts are then sent to the vendors, and the batch status changes to Processed.
Transaction
A paypoint creates a payout transaction to pay a vendor. A bill may or may not be attached.
Batch
The payout transaction is batched with other transactions. Settlement occurs in the batch.
Funded
When the batch status is Funded, the funding entity has transferred the money.
Processed
After funding, payouts are sent to vendors, and the batch status changes to Processed.
Transactions
Money in transactions are the individual actions like sales, captured authorizations, and refunds. Money out transactions are individual payouts to vendors.
Batches
A batch, also known as a payment group, groups transactions for efficient processing. Batches are automatically created by the system at a predetermined time each day (the Payabli default is 5:00 PM Eastern).
However, a batch isn’t the same thing as a transfer. You can think of a batch like a shopping cart at a grocery store.
While you’re shopping, you add items to your cart. The cart is your “batch.” Everything in the cart is temporary and you can change the contents while you’re shopping. You can add more items, swap items, or put something back on the shelf.
When you’re done shopping and are ready to check out, the batch (your shopping cart) closes and gets “processed”. The cashier scans your items, and you pay. The cart is empty again, ready for the next shopping trip.
In transaction processing, the contents of the batch are only temporary and can be adjusted until the batch is closed and sent to be processed. The batch is cleared out after processing, just like how your cart is empty once you’ve checked out.
Money in and money out transactions are batched separately and don’t intermingle.
Transfers
A transfer is the process of balancing the ledger and moves money to merchants. You can think of it as a group of transactions, fees, and adjustments for a deposit.
Transfers apply only to money in. Money out settlement works differently, and the funding of payouts is tied to batches. See Money Out: Batches and Funding for more info.
A transfer is a complex entity, made up of several elements:
- The transactions that are ready to settle
- ACH returns or chargebacks that need adjustments on that day
- Billing and fees due that day
- Other adjustments to be applied on that day
Negative transfer amounts
If a transfer’s total transactions to be paid is less than the total of returns, chargebacks, billing and fees, or other adjustments, the transfer amount will be debited from your account instead of a deposit.
For example, if the processed transactions total $100, but the total of returns, chargebacks, and other adjustments is $200, your account will be debited the $100 difference to balance the ledger.
When a transfer has a positive net amount, the funds are automatically deposited into the merchant’s accounts. In the case of a transfer with a negative net amount, the funds are automatically debited from the merchant’s accounts.
Transfer funding times
Depending on the funding type set up for Payabli account, how long it takes to receive the funds from transfers can vary. If you have questions about your funding type, reach out to the Payabli team.
Batch cutoff is 5 PM Eastern. Any transactions made after the cutoff are added to the next day’s batch.
This table has several examples that help you understand when the funds from a transaction will be deposited into the merchant’s account.
| Review Period | Transaction Time | Transaction Day | Batch Day | Fund Day |
|---|---|---|---|---|
| 0 | 4:59 PM ET | Monday | Monday | Tuesday |
| 0 | 11:59 PM ET | Monday | Tuesday | Wednesday |
| 1 | 4:59 PM ET | Monday | Monday | Wednesday |
| 1 | 11:59 PM ET | Monday | Tuesday | Thursday |
| 2 | 4:59 PM ET | Monday | Monday | Thursday |
| 2 | 11:59 PM ET | Monday | Tuesday | Friday |
Key:
- Review Days: How many days the funds are reviewed or monitored.
- Transaction Time: The time the transaction was made. Batches close at 5 PM Eastern time, and transactions made after the cutoff are placed in the next day’s batch.
- Transaction Day: The day the transaction is made.
- Batch Day: The day’s batch that the transaction is added to for processing.
- Fund Day: The day the merchant’s bank receives the money.
Learn more
This doc is meant to cover the high-level overview of how money moves with Payabli. You can get into the Pay In and Pay Out function details with these overview guides:
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