About Funding

Our Digital Account Opening product supports funding of new accounts via a debit/credit card or Automated Clearing House (ACH) transfer. This article describes the applicant funding flow during account opening, as well as funding limits and holds.

For an overview of the funding partners involved in this article, go to About Account Opening.

In this article:

• Account Opening Funding Flow
  • Funding Example
• Funding Limits
• Funding Failed
• Funding Holds
• Returns
• Fees
• Funding Customization

Account Opening Funding Flow

For account opening, regardless of funding type, the following applicant flow always applies with respect to the core banking system. A general ledger (GL) account is provided to Narmi during implementation to offset during account opening.

General funding flow:

1. Account approved (automatically or manually).
2. Narmi creates hold on account for 0-5 days.
3. Narmi creates deposit in new account offsetting a specified GL account.

If funded via debit or credit card, the following flow applies:

1. Account approved (automatically or manually).
2. Narmi initiates card transaction via Authorize.net; settles at Elavon.
3. After 1-2 days, funds are released by Elavon.
4. All funds released on a specific date are sent by Elavon via ACH to the financial institution-owned account.

If funded via ACH, the following flow applies:

1. Account approved (automatically or manually).
2. Narmi initiates card transaction via Authorize.net; originated at external bank.
3. After 3-5 days, funds are released by Authorize.net.
4. All funds released on a specific date are sent by Authorize.net via ACH to the financial institution-owned account.

Note: Your financial institution may not offer both ACH and card funding. 

Funding Example

For the following example, we assume the following configuration:

• All deposits have a 3-day hold.
• Authorize.net releases funds after 3 days.
• Elavon releases funds after 1 day.
• All funds are released by Elavon and Authorize.net via ACH to a Banker’s Bank, a Corporate Credit Union, or the financial institution itself on a daily basis.
• All deposits into new accounts are offset by a general ledger (GL) account (for example, 749150001).

Funding Limits

There are two areas in the platform where funding limits are enforced—the front-end (applicant-facing) and the back-end (not applicant-facing).

Front-end Limits

Front-end limits are visible to the applicant and they cannot proceed unless they fund accounts within your financial institution’s specified limits. If the applicant enters funding above your limit, an error message appears. We allow product-specific limits, for example, a CD can have a higher limit than a checking account.

Back-end Limits

In addition to the front-end limits, Authorize.net and Elavon also enforce limits on the back-end. These limits are a combination of daily limits and monthly limits. These limits are configured during implementation, but can be changed after implementation.

Changing Limits

Your financial institution can choose to change funding limits. To change the limit on the front-end, please contact support@narmi.com with your request. This must be approved by an executive at your financial institution. 

You may also be required to submit a limit change request with Authorize.net and/or Elavon. Narmi recommends two weeks advance notice for a limit change, as further documentation may be required for underwriting purposes to Authorize.net.

Funding Failed

Applications may enter a “Funding Failed” state during account opening if the application failed during the funding phase. This means identity decisioning was successfully processed, but the account did not proceed to the core banking system. Possible reasons for a "funding failed" state include:

• Insufficient funds
• Frozen account status
• Invalid credit card number
• Invalid expiration date
• Card reported lost or stolen
• CCV code mismatch
• Address mismatch

The card issuing institution does not provide additional details regarding the reason for the decline outside of the above codes listed. In rare cases, funding fails because the financial institution’s ACH or card limits may have been reached. In this case, contact support@narmi.com to assist you with increasing your financial institution’s limits. 

If an application enters the “funded failed” state, there is no manual intervention needed from your financial institution. The applicant automatically receives an email stating that their funding failed and suggests trying a different funding method. A link is provided that directs the applicant back to the application to enter a new funding type and successfully submit the application. Go to End-user Communications for more information on this email notification.

Funding Holds

Narmi will replace a hold on the new account for the amount of the funds deposited. This hold is configurable based on funding type, since your financial institution typically receives new funds for card-funded accounts faster than ACH-funded accounts.  

Typically, financial institutions place 0-5 day holds on newly opened accounts. Consult your Narmi Implementation Manager on the optimal hold time for your financial institution.

Returns

Returns are part of offering digital account opening at your financial institution. Typically returns are rare with card-funded applications. With ACH-funded applications, returns are visible in the Authorize.net portal. Please reference your Authorize.net and Elavon manuals for more information regarding returns.

Fees

Both Elavon and Authorize.net charge fees for processing card and ACH funds.

Elavon:

• Deposits for newly funded accounts are gross of fees. For example, if $200 of card-funded accounts are opened today, your financial institution will receive $200 in new deposits within 1-2 business days.
• On a monthly basis, Elavon deducts its processing fees from the same account it sends deposits to.
• Statements for the monthly fees are available in the Elavon portal (www.mypaymentsinsider.com). 

Authorize.net (eCheck):

• You financial institution can have fees for ACH transactions be net or gross.
• By default, all financial institutions start with ACH deposits being net of fees.
• Once a base line of activity occurs, Narmi is able to request a change to gross funding only if your financial institution wants this change to occur.
• Authorize.net fees can either be charged to a credit card or deducted from the same account it sends deposits to.
• Note that other components of Authorize.net billing include a risk reserve which may be instituted if your financial institution experiences a higher than normal return rate. This risk reserve can be fixed or rolling, and is not technically a fee.

Funding Customization

Your financial institution can customize the following funding-related features via Institution Settings:

• DAO Card Funding Types – The allowed card types for funding an account, possible options are ["visa", "mastercard", "discover", "amex"]
• Hold Length For Funding via ACH – The number of days that a hold is applied when an applicant uses a bank account for initial funding.
• Hold Length For Funding via Debit/Credit Card – The number of days that a hold is applied when an applicant uses a debit or credit card for initial funding.
• Max Funding Amount via ACH – The maximum funding amount for Account Opening applications though ACH. To turn funding via ACH off, change this setting to 0.
• Max Funding Amount via Card – The maximum funding amount for Account Opening applications via card.