Transactions and Transfers

Our APIs separate the concepts of Transactions and Transfers. This guide will help you understand their distinctions and how to use them successfully.

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Transactions are the immutable record of financial interaction. You can think of them as the line items on your bank statement. A Transaction with a positive amount means there's more money in your account. A Transaction with a negative amount means there's less money in your account. You can't directly create a Transaction, and they never change after they are made. Anything that causes money to move around your Increase account results in a Transaction - initiated or received transfers, card payments, earned interest, and more.

Transfers- which includes ACH Transfers, Wire Transfers, etc - are the most common way to initiate money movement over external networks with Increase. Transfers are one-to-many with Transactions, which they create as side-effects. Unlike Transactions, Transfers are stateful and transition through a lifecycle of different statuses as they move across the network.

Example: Creating an ACH Transfer

Let’s examine the lifecycle of a hypothetical ACH Transfer.

Day 1

• You make an ACH Transfer (via the API or Dashboard) to pay a vendor $100.
• As a side effect, this immediately creates a -$100 Transaction (as you now have $100 less in your account).
• The ACH Transfer has a status of pending_submission. A few minutes later, Increase submits it to the Federal Reserve and changes its status to submitted.

Now let’s say that unfortunately you entered the wrong account number for the vendor. The next day, the receiving bank recognizes the error and returns the ACH Transfer, which means we give you your $100 back.

Day 2

• The ACH Transfer transitions to status returned.
• We make a second Transaction for +$100 to indicate that you now have 100 additional dollars.

Pending Transactions

Some more complicated funds flows at Increase also create Pending Transactions. These represent potential future credits or debits of money into your account and are a separate resource from Transactions. Notably, while Transactions are immutable, Pending Transactions are not, as they don’t guarantee the movement of money. For example, Pending Transactions are created for card authorizations (which can mutate or timeout) and also when placing a hold on an account (which can be removed). Pending Transactions do not affect your current balance (which is the balance you earn interest on), but may affect your available balance (which is the amount you’re able to move out of Increase).

Example: Creating an ACH Transfer that requires approval

In this example, your account has Transfer Approvals enabled, which means that your teammate needs to approve a Transfer before it actually goes out.

Day 1

• You make an ACH Transfer (via the API or Dashboard) to pay a vendor $100.
• Transfer approvals are required, so the Transfer status is set to pending_approval.
• A Pending Transaction is created for -$100. (You’re still earning interest on the $100, but we’ve set it aside.)

Day 2

• Your teammate approves the ACH Transfer in the Dashboard.
• The transfer’s status is updated to pending_submission as above.
• The existing Pending Transaction for -$100 transitions to status: complete, meaning it no longer affects your available balance.
• A Transaction is created for -$100 to reflect the money permanently leaving your account.

Denying approval for an ACH Transfer

Had your teammate instead blocked the ACH Transfer, Day 2 would have instead looked like:

• Your teammate blocks the ACH Transfer in the Dashboard.
• The transfer’s status is updated to canceled.
• The existing Pending Transaction for -$100 transitions to status: complete, meaning it no longer affects your available balance.
• No Transaction is created.

Dashboard

In Dashboard, you’ll be able to see the relationship between a Transfer and all of its Transactions and Pending Transactions as a timeline.