Lithic offers two distinct ways to record money movement against a Financial Account:

Both are Lithic APIs that produce fully ledgered transactions — each with its own status, balance impact, and event history. The distinction is not whether the activity is ledgered (it always is), but who moves the money:

Lithic-processed payments are payments that move on Lithic's own money-movement rails. Lithic originates and processes the movement, interacts with the payment network, and drives the transaction through its lifecycle. Use Payments if your program wants Lithic to originate ACH or Wires.
External payments are handled by Lithic's External Payments API — a dedicated product for programs utilizing 3rd-party providers for all money movement (ACH, Wires, paper checks, etc.). For programs using External Payments, Lithic doesn't move the funds, but the External Payments API still ledgers the activity as a full transaction on the Financial Account: you tell Lithic that an amount moved in or out through an external channel, and Lithic records it with its own status, balance impact, and event history.

At a glance

	Lithic-processed payments	External payments
Who moves the money	Lithic, on its own rails	An external party
What the API does	Originates and processes the payment	Records money that already moved elsewhere
Lifecycle driver	Lithic advances state as the network processes	You advance state to mirror the external side
Transaction family	`PAYMENT`	`EXTERNAL_PAYMENT`
Typical use	Send or pull funds via ACH or Wire	Keep balances in sync with a 3rd-party payment processor

Which one is right for your program?

Set up your program with Lithic-processed payments when you want Lithic to actually manage and move the funds. Lithic handles network submission and settlement, and updates the transaction as it progresses.

Set up your program with external payments when an external provider manages and moves the money and you need the Lithic ledger to reflect it. For a full walkthrough of recording, settling, releasing, and reversing this activity, see Using External Payments.