Bank Account Transfers Processing

Processing of bank account transfers is a necessary functionality for modern businesses that’s why they rely on payment gateway providers that offer this feature. But if you want to add this functionality to your payment gateway you need to be aware of two systems used for processing of bank account transfers in different countries. They are one and two-phase systems.

One-phase approach is used in the USA and Canada. Merchant sends the file with transactions to be processed to the clearinghouse, within several days a merchant gets the requeted funds from the clearinghouse and finally the clearing house sends transaction requests to the respective banks for approval (if something goes wrong money is automatically withdrawn from the merchant’s bank account).

Systems used in the UK, EU, and Australia are two-phase. It means that merchant needs to register all bank account it plans to process payment through within the system. Only after that, a merchant will get permission to process transactions through these bank account.

The diagram below provides the comparison of the one and two-phase systems that are used for processing of bank account transfers. Additional information on this topic is shared in the articles at #UniPayGateway and #Paylosophy blog.