Dwolla Integration #

Dwolla is a third-party service responsible for managing all operations involving the transfer of funds from investors to the escrow account at North Capital. This is where the funds are held until the deal is finalized.

Dwolla & Funding Sources: #

Investors can link a bank account to their Dwolla wallet.
Investors can deposit funds into the wallet.
Investors can withdraw funds back to their bank account.
Investors cannot withdraw more funds than their current balance.
The bank account used for withdrawing funds does not need to be the same one from which the funds were originally deposited into the wallet.

Load Funds #

Users can only load funds into their wallet from a bank account associated with that wallet.
The deposit transaction is displayed in the Transaction History with a status of Pending; its status can be updated to Processed or Canceled/Failed.
It may take up to 5 working days for the deposit transaction to settle in the wallet.
Users can immediately use loaded funds for investing, without waiting for the ‘Load Funds’ transaction to be fully processed.
Users can cancel a load funds transaction before it reaches the Processed status, with the exception of investment transactions.

Pending Incoming Funds #

After loading funds into the wallet from a linked bank account, users can immediately use them for investing, even if the funds have not yet settled in the wallet. This pending incoming transaction is displayed under a Pending Incoming Funds.

A pending incoming transaction cannot be canceled if there is a pending investment in CONFIRMED or LEGALLY CONFIRMED that depend on that transaction. To cancel a pending transaction, any dependent pending investment must be canceled first.

Pending incoming transactions cannot be withdrawn until they have been processed and are included in the current balance.

Test Info: To have a pending incoming transactions settled in the wallet and displayed in the actual wallet balance, the corresponding transaction in the Dwolla admin panel should be processed first.

Withdraw Funds #

Users can initiate a withdrawal transfer from the wallet to a bank account linked to this wallet.
Users can withdraw funds to a bank account different from the one originally used to load funds.
Only funds that have settled in the wallet can be withdrawn to a bank account. If there are pending outcoming funds (pending investments), the amount available for withdrawal is calculated as current balance - pending outcoming funds.
Pending incoming transactions cannot be withdrawn until they have been processed and are included in the current balance.
Users cannot withdraw funds if the Sift Payment Score Threshold is less than the Payment Score in the account’s details. !!! TBD

Dwolla & Investment Process: #

Funds movement map

Dwolla initiates a transfer to North Capital once an investment is legally confirmed (after KYC and Accreditation requirements are met by the investment account), where the funds are held in escrow until the deal is either finalized or canceled.
Investment status: LEGALLY_CONFIRMED
When Dwolla starts the transfer, its status becomes Pending. A transfer is considered pending when the funds have not yet left the funding source or are in transit to their destination.
After the transfer is successfully completed, it is marked as Processed. This indicates that the funds have arrived at the appropriate balance in North Capital, although it might take additional time for the funds to become accessible.
Between the transfer statuses of “pending” and “processed,” two other statuses can occur: “cancelled” or “failed.”
Failed: Transfers can fail due to various reasons, such as insufficient funds, an invalid account number, no account or unable to locate account, etc. It’s important to note that, although rare, a transfer marked as “processed” can later be returned as “failed.”
Investors are refunded if a deal closes unsuccessfully (either because an admin user confirms the investment cancellation or the offering is unsuccessfully closed). In such instances, funds are returned from the escrow at North Capital to the investor’s Dwolla wallet or another original funding source, depending on the payment method chosen by the investor during the investment process for that specific investment. The transfer is then marked as Cancelled.
Investment status: CLOSED_UNSUCCESSFULLY / CANCELED_BY_MANAGER