What is Alliance's policy on credit transactions?

Alliance requires pre-funding of all credits.  The standard account setting is that transactions must be imported by Wednesday if pay day is a Friday.

What is Alliance's position regarding "sweeping" funds into and out of an impound or central bank account controlled by the payroll processing company?

Alliance does not encourage the use of "sweeping" funds into a central account and then paying payroll out of that account.  Due to our prefunding policy, additional days need to be incorporated to the processing calendar to allow for the credit to the impound account to take place no later than the same day as the debit out.  Also, unless the funds are in the impound account overnight, there is no real benefit to the merchant who uses the  "sweep" process. 

When do I need to have my payroll files uploaded/imported into Alliance's Gateway?

For merchants who are not sweeping funds into or out of a central impound account, the general answer is 2 business days.  So if pay day was Friday, then the cut off would be Wednesday by 5pm pacific.

An example of a non-sweep time line would be:

Wednesday by 5pm pacific - upload and import file containing debits to employers and credits to employees all dated for Friday's date.  Upon file importation, the date of the debit will be adjusted so that the debit is transmitted Wednesday night. 

Thursday - the debit posts to the employers' accounts and that night the credits are transmitted to the employees.

Friday - the credits post to the employees' accounts.

Ok, but what if we'd like to continue sweeping funds into a central impound account?

If you plan to sweep funds into a central account or impound account, then you need to add additional day(s) (1 additional day is required although 2 is suggested) to the above schedule.  The minimal requirement would look like the following:

Tuesday by 5pm pacific - upload and import file containing debits to employers and credits to payroll impound account all dated for Thursday AND debits to the impound account and credits to the employees that are dated for Friday's pay date.  Upon file importation, the date of the debit will be adjusted so that the debit to the employer is transmitted Tuesday night and the debit to the impound account will be transmitted on Wednesday night.

Wednesday - the debit posts to the employers' accounts and that night the credits are transmitted to the impound account.

Wednesday - the credits post to the impound account and the debit posts to the impound account.  BE WARNED - banks are not required to post the credit first and then the debit.  If your bank - for whatever reason - posts the debit first and funds are not available, it is possible that they would return the debit as R01 Insufficient Funds and then post the credit.  If a debt from the impound account is returned R01 (Insufficient Funds), the merchant account with Alliance would be cancelled.  This is a "one strike and you’re out" policy.  It is for this reason that we strongly suggest doing a Monday import for a Friday pay date if you intend to sweep funds.

Thursday - the credits to the employees' accounts would be transmitted.

Friday - the credits post to the employees' accounts.

How come some of the credits to our own account seem to be held while others process as expected?

It is our policy to place all "next day credits" on hold when they are being credited directly to the payroll company.  A next day credit occurs when a merchant uploads a file on Thursday with a Friday pay date (a clear violation of the prefund policy) and that file has a debit to xyz and a credit to the payroll company or a credit directly to the employee.  Since this is currently a manual process, it is possible that sometimes a next day credit is or will be overlooked.  However, please be advised that our standard policy is that when we see credits that violate the prefund requirement, those credits will be placed on hold.  This means that if you upload and import a file on Thursday with a debit to yourself and a credit to yourself within the same file all dated for Friday, the credit to yourself is going to be placed on hold until Friday night.

In the past, we have allowed next day payroll credits - credits to the employees - process uninterrupted.  A call was made to the payroll processer informing them of the violation, but we did not hold the outgoing credits.  Be advised, due to risk assement, all next day credits will be placed on hold unless prior approval has been granted.  This means that payroll could be delayed. 

Ok, I followed your sweep time-line and on Wednesday when I should have had a debit and a credit to my impound account, we received only the debit and it bounced!

Currently, the process of reviewing the next day credits is done manually.  (Programming will be implemented soon that will eliminate the need to manually review these items.)  Because it is done manually, there is more room for error.  Due to the sheer amount of next day credits that we have to sift through each pay period, it is possible that when looking through the file, what will be seen is two transactions with the same date (what appears to be a violation) all set to take place at the same time. And per the policy, the credit will be placed on hold until the following day’s file transmission.  To avoid that, we suggest 1.) no sweep or 2.) if you must sweep, then follow the Monday for Friday time-line as this ensures that the credit to your impound account takes place one full day prior to the debit out or 3.) continue to create the sweep transactions but void out the interrum debit/credit to your own account.

Can you go over the Monday for Friday time-line?

If the credit is held by mistake, will Alliance reimburse us for any NSF/Overdraft fees that result?

No.  The risk has been explained and by processing Tuesday for Friday, using a sweep method, you accept the risks that could be involved.

Jessica Benzakein
Senior Operations Analyst / ISO Manager
Alliance Payment Technologies
302 S. Milliken Ave, Suite G-1, Ontario, CA 91761
P: 800.675.1330 x4206   F: 866.316.3898
Merchant Support: 800.923.8652