Funding: Digital Account Opening (DAO) FAQs

TABLE OF CONTENTS

• How Funding Works
  • What happens when a funding method is entered?
  • What happens after Alloy approval?
  • The Cancel button
  • When are refunds attempted?
• Hold & Settlement Timelines
  • Card (Stripe)
  • ACH (Plaid / NACHA)
• Plaid Funding Errors
  • Plaid Identity Match failure
  • Plaid service unavailability
  • Insufficient funds
  • Application stuck in "Retrieving Funds"
  • Bank not supported by Plaid
• Plaid Security & Fraud Tools
  • What is Plaid Identity Match?
  • Special cases
  • Is Identity Match enabled for your credit union?
• Reprocessing Funding
  • When to reprocess vs. when to refund
  • How to request reprocessing
• Frequently Asked Questions

This article explains how Clutch handles funding during Digital Account Opening — including when funds are captured, how holds work, ACH and card settlement timelines, Plaid errors, fraud tools, and how to handle reprocessing scenarios.

How Funding Works

What happens when a funding method is entered?

The behavior differs by payment type:

• Card (Stripe): A temporary authorization hold is placed on the card at the time the applicant submits their funding information. No funds are captured at this point.
• ACH (Plaid): Plaid verifies that sufficient funds are available in the linked account at submission. No hold is placed on the member's account — funds are not reserved.

If the application is not approved, no payment is ever captured. Card holds expire automatically after 7 calendar days. Credit unions can release holds earlier via the Stripe dashboard.

What happens after Alloy approval?

Once Clutch receives approval from Alloy, the following sequence runs in order:

• If any step in this sequence fails, the process stops at that point.
• Funds are only captured after Alloy approval — declined and pending applications are never charged.
• For ACH, Plaid runs a second balance verification at the time of approval before queuing the NACHA entry.
• If funds are captured but account booking fails, contact Clutch Support before taking any other action. See Reprocessing Funding below.

The Cancel button

The Cancel button in the Clutch Staff Portal changes an application's status and prevents any future processing. When clicked, it also attempts to:

• Release the card hold — if funds have not yet been captured.
• Initiate a refund — if funds were already captured.

When are refunds attempted?

Clutch only initiates a refund when a staff member clicks Cancel in the Staff Portal. Refunds are not triggered automatically. Key points:

• If the application was not approved, no funds were captured — only a card hold may exist, which expires on its own after 7 days.
• If the application was approved, clicking Cancel causes Clutch to attempt a refund via the Stripe or Plaid API.
• Always verify actual payment and refund status in the Stripe dashboard or the Clutch Funding Reconciliation Report — do not rely solely on the Staff Portal status.

Hold & Settlement Timelines

The following tables summarize when holds are placed, when funds settle, and relevant cutoff times for each payment method.

Card (Stripe)

ACH (Plaid / NACHA)

Plaid Funding Errors

There are several reasons an applicant may encounter an error during Plaid-based ACH funding. The sections below cover the most common scenarios and how to handle each.

Plaid Identity Match failure

• If your credit union has enabled Plaid Identity Match, the applicant's personal information is compared against the account holder data on file at their external bank. If the information does not match within the configured thresholds, the applicant cannot use that specific account for funding.
• What the applicant sees: A message within the Plaid modal indicating they cannot use that account for funding.
• Resolution: The applicant can select a different funding method (another bank account or a card) and continue — the application itself is not blocked, only that funding source. See Plaid Identity Match below for more on how this feature works.

Plaid service unavailability

• If Plaid is temporarily unavailable due to a service outage or maintenance, applicants will see an error within the Plaid Link modal.
• Resolution: The applicant can choose a different funding method and proceed. If Plaid outages appear widespread, check Plaid's status page and advise applicants to try again later or switch to card funding.

Insufficient funds

• Plaid checks available balance at both submission and approval. If the balance check fails at either point — for example, if the member's account balance dropped between submission and when Alloy cleared the application — the ACH transaction will not be queued and funding will fail.
• If resubmission is attempted before the lockout period expires (there is a 15-minute lock after each retry), the timer resets and prevents a successful retry. Once the lockout window fully clears, the application can be resubmitted.
• Resolution: Confirm with the applicant that sufficient funds are available before resubmitting. If the balance issue persists, ask the applicant to update their payment information to a different account or card.

Application stuck in "Retrieving Funds"

• In some cases, an application may become stuck at the "Retrieving Funds" step with no visible way to resubmit. This typically occurs when an Alloy fraud review places the application on hold for an extended period. If the member's account balance drops during that hold window, funding fails when the review clears — and subsequent retries trigger a 15-minute resume lock that resets each time an attempt is made.
• Resolution: Wait for the lockout period to fully expire, then resubmit the application. Confirm with the applicant that sufficient funds are available before doing so. If the application remains stuck after the lockout clears, contact Clutch Support with the Application ID.

Bank not supported by Plaid

• Not all financial institutions are available through Plaid. If an applicant's bank is not in Plaid's network, they will not be able to complete the ACH link flow.
• Resolution: The applicant should fund via card, or use a different external account at a Plaid-supported institution.

Plaid Security & Fraud Tools

Clutch integrates with Plaid's fraud prevention tools to protect credit unions from unauthorized ACH transactions during Digital Account Opening. The primary tool is Plaid Identity Match.

What is Plaid Identity Match?

Plaid Link confirms that an applicant can authenticate into an external bank account — but authentication proves access, not ownership. Plaid Identity Match closes this gap by verifying that the applicant is the actual account holder before ACH funds are originated.

Identity Match compares the applicant's submitted personal information against the account holder data on file at their bank, including name, phone number, email address, and physical address. The check runs automatically in the background during the bank-linking step. For legitimate applicants who own the account they are linking, it is nearly invisible — they only see a short prompt noting that the primary applicant must be an owner of the linked account.

Special cases

• Joint accounts: The primary applicant's information is used for the match. As long as the primary applicant is listed as an account owner at the external bank, the match will pass.
• Minor accounts: The guardian's information is sent to Plaid. The match passes if the guardian is listed as an account owner of the linked account.

Is Identity Match enabled for your credit union?

Plaid Identity Match is an opt-in feature. It requires a signed Plaid addendum and activation by Clutch. Because it is not universally enabled, behavior may differ between credit unions. Contact your Clutch CSM to enable it, adjust thresholds, or review your current configuration.

Reprocessing Funding

Reprocessing is needed when an application was approved and funds were captured, but account booking failed — leaving a captured payment without a corresponding member account. These situations require careful handling to avoid double-charging or unintended refunds.

When to reprocess vs. when to refund

How to request reprocessing

1. Confirm in the Clutch Staff Portal that the application status shows funds captured (check the funding section of the application record).
2. Note the Application ID (numeric ID) and the step at which the failure occurred.
3. Contact Clutch Support at support@withclutch.com with the following:
   • Application ID
   • Member name
   • Funding amount and method (card or ACH)
   • Description of what failed (account creation error, booking failure, etc.)
4. Do not attempt to manually create the account or move funds outside of Clutch without coordination from the support team.

Frequently Asked Questions

Do declined applications trigger refunds?

Are refunds automatic when an application is pending?

What if an older application still shows a credit, but no accounts were created?

What if an application needs to be canceled but the credit union wants to keep the funds?

How can I verify refund or payment status?

What should I include when opening a support ticket for a funding issue?

• Include the Application ID, member name, funding amount and method, the step at which the failure occurred, and any error codes visible in the Staff Portal. For recurring errors affecting multiple applications, note that pattern explicitly — it typically indicates a configuration issue rather than an isolated transaction failure.