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Lifecycle and errors

Here we'll learn about the different statuses a payment can transition into after it has been created, as well as learn of possible errors that may result in a payment's failure and how Method handles them.

Lifecycle​

Once a payment has been created, it will initially have the pending status. This indicates that the payment has not yet been processed, and is still allowed to be canceled.

caution

Only payments in the pending status can be canceled.

If the payment is created before the current business day's cutoff time (Monday - Friday 10:30 AM, 1:30 PM, and 4:30 PM CST), it will be processed and transition into the processing status. If it is created after the current business day's cutoff time, the payment will be processed on the next business day.

If the payment was successful, the transferred funds should be reflected on the destination account in the next morning. However, for the purpose of security, most financial institutions have varying holding periods which may cause the funds to reflect at a later date.

Once a payment has been sent to the destination account, its status will transition from processing to sent.

ℹī¸ See the payment statuses for details on payment statuses.

Errors​

Unsuccessful payments result in either the failed or reversed status.

Failed payments​

When a payment's status transitions from processing to failed, this indicates that the retrieval of funds from the source account failed before the funds reached the destination account. This can occur as a result of the following:

  • The source account does not have sufficient funds for the amount of the payment.
  • The holder of the source account revoked authorization with their bank to prevent Method from pulling the funds.
  • The source account had invalid account information.
  • The source account has been closed.

Reversed payments​

When a payment's status transitions from sent to reversal_required, this indicates that the retrieval of funds from the source account failed after the funds reached the destination account. To resolve this, Method will create reversal to retrieve the incorrectly transferred funds from the destination account.

note

The transition from sent to reversed can occur within 60 days of the failure's occurrence.

Errors and Capabilities​

To protect our customers from risky transactions, Method automatically revokes capabilities from either the accounts or account holders (entities) that are associated with a failed payment.

Method revokes capabilities for an account or account holder based on the following categories of payment failures (Authorization, Administrative, Insufficient funds).

Authorization​

The account holder reported to their account's financial institution that a transaction processed through Method was unauthorized. As a result, both the account and the account holder (entity) will then be disabled and revoked of all capabilities.

Administrative​

Payment failures due to administrative errors are caused by any of the following:

  • Incorrect account information: the account number or routing number is incorrect.
  • The account could not be located.
  • The account has been closed.

The account will then be disabled and revoked of all capabilities.

Insufficient funds​

If repeated payment failures occur due to a lack of funds from a source account, the account will be disabled and revoked of all capabilities.

note

If you believe that an account or account holder was incorrectly disabled and would like to re-enable capabilities, contact team@methodfi.com to resolve this issue.

Setting up webhooks for lifecycle transitions​

To automatically get notified once a payment transitions into a specific status, you can set up a webhook that sends information regarding each transition.

ℹī¸ See the webhook object for details on the API.