Good news – we are now back online with ACH. Per my previous email, although we kept the capability in the API for test-mode, we had to pause it in production (meaning “live”). Since then we’ve been working with the banks on how we handle the risks, while continuing to operate our daily escrow services via wires & checks from investors.
So for portals who want to allow investors to move funds via ACH, it’s now an available option in the API. A few things to note…
Use of System – is entirely at each portals option. You can elect to enable investors to send funds to escrow via any or all of the 3 options (wires, ACH and checks). Some portals only want to allow investors to wire funds, which is fine. Others only want to use ACH, which is also fine. Many want to give investors the option to use whichever method they want, and that’s fine. You control this via the API so you can do what’s best for your operations.
ACH Debit Authorization – investors who send funds via the API will have to e-sign an ACH debit authorization form, as required by the bank and NACHA standards. This will be a one-time thing and cover them for all future investments. Investors who wire funds or send checks will obviously not have to e-sign the form. API calls will, in our system, first check to see if the authorization is on file and, if not, deliver our esign+ window with the form to be signed.
Bank Account on Fundings – when escrow closes, the issuer needs to open a business checking account at the bank (we will help faciliate this). Funds will then be transferred to this account, rather than be wired to the issuer. The company (issuer) can then withdraw funds or use the account at their discretion. Heck, they can even apply for a loan at the bank and possibly leverage their ROI. Investors will <<not>> need to open an account; neither for escrow nor for our soon-to-launch payment processing services (they can if they want, it’s just not mandatory).
For more details, log on to your FundAmerica account and check out the API Documentation. And of course you can reach out to me or the rest of the team here anytime.