Introduction

When borrowers give their bank account information to a lender and authorize them to make a payment, the lender has to go through the process of communicating with banks so the money gets moved from the customer's account to the lender's. Some lenders enlist the help of payment processing companies, but others choose to handle it themselves through batch processing.

This article will explain how Canadian lenders can batch electronic fund transfer (EFT) payments with CPA-005 files. If you're already familiar with the basics, consider skipping ahead to our article Payment Processor CPA-005.

Highlights

• You can set up any number of CPA-005 processors in Secure Payments.
• Borrowers' EFT bank account information can be safely saved and tokenized in Secure Payments as a payment profile. When you log a payment, you can select your CPA-005 processor to handle the transaction.
• In Secure Payments, the processor batches the transactions together and creates a CPA-005 file, which you then send to your bank. The bank will handle the actual task of moving money from borrowers' accounts into yours.
• If a payment fails, the bank will send a file with Return Codes explaining why the transaction didn't go through. These codes can prompt automatic actions in LMS.

Where Does CPA Batch Processing Fit?

If a lender wants to accept EFT payments, they need to have a system in place to communicate with their bank. Some lenders will hire a payment processing company to handle this for them, like EFT Canada or VersaPay. Those companies basically do what you and Secure Payments would be doing: batching payments, preparing files, and sending them to banks. Working with a processing company means less work for you, but handling the payments yourself will be less expensive.

This Feature is Not 

Let's take a second to clear up any possible misconceptions about CPA-005 files and LoanPro:

• CPA-005 is not NACHA. NACHA is the United States' equivalent to the CPA: they're the organization that handles the e-check network, sets standards for merchants handling e-check transactions, and creates the file format used to send transactions to banks. The major difference is really just the country the operate in.

What’s Next?

From here, you're probably ready to set up some CPA-005 processors in Secure Payments. After that, you'll be all ready to Log Payments. And if you really want to get the most from your batched payments, we recommend setting up automatic actions based on Return Codes.