Failed Payments & Retries

Payment failures are a normal part of processing ACH payments. The platform has an automatic retry system that handles most failures without admin intervention. This page explains how failures are categorized and what happens at each stage.

Types of Failures

Insufficient Funds (NSF)

The most common failure. The investor's bank account doesn't have enough money to cover the investment amount.

• Retry strategy: Up to 3 retries with escalating delays
• Retry schedule: 1 day → 3 days → 7 days
• Investor notification: Receives an "insufficient funds" email with the date of the next retry attempt
• Example timeline:

Provider Errors

Technical failures from the payment provider (network issues, temporary outages, validation problems).

• Retry strategy: Up to 5 retries with escalating delays
• Retry schedule: 5 minutes → 30 minutes → 2 hours → 12 hours → 1 day
• Investor notification: Not notified of provider errors (they're technical and usually resolve quickly)

Returned Payments (ACH Returns)

The investor's bank accepted the debit initially but then returned it. This can happen 2-3 business days after the initial processing.

• Common reasons: Insufficient funds (R01/R09), account holder dispute, account frozen after initial acceptance, bank discovers issue post-processing
• Handling: The system evaluates whether a retry is appropriate based on the return code:
  • NSF returns (insufficient funds): Treated the same as an NSF failure — retried automatically on the same 1d / 3d / 7d schedule. The investor receives an "insufficient funds" email with the retry date, and their investment shows "Payment Retrying" on the portal.
  • Permanent returns (account closed, authorization revoked): No retry is scheduled. The ops team and investor are notified.

Permanent Failures

Some failures cannot be retried -- the underlying issue won't resolve with time.

• Examples: Account closed, authorization permanently revoked, regulatory block
• What happens: No retry is scheduled. The ops team is notified immediately via email.
• Admin action required: An admin needs to contact the investor and resolve the situation.

The Retry Flow

What Happens When Retries Are Exhausted

When all retry attempts are used up without success:

1. Ops team is notified -- an email is sent to the operations team with full details of the failure history
2. Investor is notified -- the investor receives a "payment failed" email
3. Audit trail updated -- the exhaustion event is recorded with the failure count and all attempt details
4. Investment remains in current state -- it doesn't automatically cancel. An admin decides the next step.

Emails Sent During Failures

What Admins Should Know

• Most failures resolve automatically -- the retry system handles the majority of NSF and provider errors without intervention. Don't manually intervene while retries are still scheduled.
• Check the audit trail -- every failure, retry schedule, and retry attempt is logged. Look at the audit trail to understand the full history.
• Retries exhausted = you need to act -- when you receive a "retries exhausted" notification, the system has done all it can. Options include: contacting the investor, cancelling the investment, or manually triggering a new payment after the investor resolves their banking issue.
• Returned payments are different from failures -- a return means money was briefly in transit and was pulled back. However, NSF returns are handled just like NSF failures -- the system retries automatically and the investor sees "Payment Retrying" in the portal.
• NSF may indicate the investor needs time -- sometimes investors commit before having the funds ready. The escalating retry schedule (1, 3, 7 days) gives them time to fund their bank account.