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Sending a FedNow transfer

FedNow transfers can be sent at any time during the day and funds will settle within seconds. However, not every institution is reachable on FedNow. You can use the Routing Numbers API to confirm whether an institution supports FedNow, and fall back to ACH or wire when it doesn't.

Lifecycle

StatusDescription
pending_approvalThe transfer requires approval from a member of your team.
pending_reviewingThe transfer is pending review by Increase.
pending_submittingThe transfer is queued to be submitted to FedNow.
pending_responseThe transfer has been submitted and is pending a response from FedNow.
completeThe transfer has been sent successfully and funds have settled.
canceledThe transfer has been canceled.
reviewing_rejectedThe transfer was rejected by Increase during review.
rejectedThe transfer was rejected by the network or the recipient's bank.
requires_attentionThe transfer requires attention from an Increase operator.

Sending a FedNow transfer with Increase

Originating a FedNow transfer through the Increase API involves you, Increase, FedNow, and the receiving bank.

  1. You make a POST /fednow_transfers call with the details of how much you'd like to send and data about the recipient. A FedNow Transfer is created with a status of pending_submitting.
  2. A Pending Transaction is immediately created for the full amount of the transfer in order to hold funds.
  3. When the message is submitted to FedNow (usually within seconds), Increase updates the FedNow Transfer object with its submission details, including the network message_identification, and the status is updated to pending_response.
  4. FedNow forwards the transfer details to the receiving bank. The receiving bank responds with an acknowledgement. Once the acknowledgement is received, funds are settled instantly and the FedNow Transfer object status updates to complete.
  5. A Transaction is immediately created for the full amount of the transfer and funds are removed from your Account. The Pending Transaction is marked as complete.
  6. If the network or the receiving bank is unable to complete the transfer, it responds with a rejection and the transfer status updates to rejected. The FedNow Transfer object is updated with its rejection details, the Pending Transaction is marked as complete, and no additional Transactions are created on your Account.

The entire process usually completes within seconds. Each transfer carries a unique_end_to_end_transaction_reference (UETR) that identifies it across the network.

Approvals

For transfers that require approval from another team member, the FedNow Transfer is created with a status of pending_approval and a Pending Transaction is created to hold funds.

If the transfer is approved, the status is changed to pending_submitting and things progress normally.

If the transfer is not approved, the status is changed to canceled. The Pending Transaction status updates to complete, no transfer information is submitted, and no additional Transactions are created.

Reviews

Occasionally a FedNow Transfer needs to be manually reviewed by an Increase operator. When this happens the status is set to pending_reviewing. Once reviewed, the status changes to pending_submitting and the transfer progresses normally.

Rejections

A transfer can be rejected in two ways.

Rarely, Increase rejects a transfer during review. The status updates to reviewing_rejected, nothing is submitted to the network, and no additional Transactions are created.

More often, FedNow or the receiving bank rejects a transfer after submission. The status updates to rejected and the FedNow Transfer's rejection object includes a reject_reason_code. These codes map to the network's ISO 20022 reason codes, so you can show your user a precise reason. Common reasons are that the destination account is closed (account_closed, FedNow code AC04), does not exist (invalid_creditor_account_number, AC03), or that the amount is higher than the recipient is authorized to receive (amount_exceeds_bank_limits, E990).

See the API reference for the full list.