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Transfers may fail or be returned for several reasons.

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Insufficient funds

If there are not enough available funds in your account at the time a transfer is processed, the transfer will not be completed. Recurring transfers with insufficient funds will fail and will not automatically retry unless rescheduled.

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ACH returns

ACH transfers may be returned by the receiving bank due to incorrect account details, closed accounts, or other banking errors. If an ACH is returned, the funds will be credited back to your account once received from the external bank. When an ACH transfer is returned, you will receive an email notification with details about the return, including the return reason and the amount. Return timelines vary depending on the receiving institution.

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International wire beneficiary verification

When you add a new international wire beneficiary, Karat runs a compliance verification check. If the beneficiary’s verification is still pending when you initiate a transfer, the transfer is held and appears under Processing (no action needed) in your activity table.
  • If the beneficiary is verified, the held transfer is automatically submitted.
  • If the beneficiary is disabled (did not pass verification), the held transfer is canceled and the funds remain in your account.
  • If you delete a beneficiary with pending transfers, those transfers are also canceled.
For approval-required transfers, a transfer request submitted for an unverified beneficiary will show a Pending status until the beneficiary is verified. If the beneficiary is disabled or deleted, the request is automatically canceled.

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Canceled or restricted accounts

Transfers may also fail if the recipient account is closed, frozen, or unable to receive funds. If a transfer fails and you are unsure why, contact us so we can review the transaction details with you. Karat is a financial technology company, not a bank. Banking services provided by Grasshopper Bank, N.A., Member FDIC. The Karat Visa® Business Credit Card is issued by Cross River Bank, Member FDIC, and pursuant to a license from Visa️ USA.