Bank account tools

Overview

Due to recent updates to the Nacha ACH rules ACH Originators of WEB debit entries are required to use a “commercially reasonable fraudulent transaction detection system” to screen WEB debits for fraud. This existing screening requirement is being supplemented to make it explicit that “account validation” is part of a “commercially reasonable fraudulent transaction detection system.” The supplemental requirement applies to the first use of an account number, or changes to the account number. Common solutions include:

• An ACH prenotification
• ACH micro-deposits verification
• Commercially available validation service
  -Bank credential based e.g. Plaid or MX
  -API based e.g ACHQ account insights

ACH "pre-notes" are essentially $0 ACH debit transactions used to probe an accounts' status (does it exist?) prior to the initiation of a "live" transaction while "micro-deposits" require small transactions to be sent to the users account and requires the user to confirm the amount(s) at a later date. Both options are slow, with high friction and ultimately, limited value:

Existing solutions are not great!

Account Insights

ACHQ Sentry offers a vastly superior service to prenotes/microdeposits and a fantastic back-up or alternative to credential-based authentication services.

Account Status API

Enable faster, compliant payment origination without increasing customer friction. The bank account status endpoint uses the routing and account number to provide real-time account status for consumer and business accounts giving you confidence that an account is valid prior to approving a deposit or accepting a payment.

• Confirm that an account is open, active and in good standing prior to accepting any type of payment
• No customer interaction required
• Real-time response
• Daily updates from all major banks
• Account created / last seen data

The bank status response also includes the following fields for deeper analytics:

Account ID API

Take all of the cool stuff from the little blurb above and go one-step further by using the bank account ID endpoint to at once verify the status and owner of a bank account. Account ID provides real-time verification that a customer is an authorized signatory on a bank account to confirm transactional authority on the account prior to processing a payment

• Match consumer or business names on checking and savings accounts
• Fuzzy matching compensates for nicknames, typos, and other data entry errors to minimize false negatives
• Optionally incorporate additional information including address, phone number, TaxID, or DOB for more refined results

Automatic rulesets

If you'd rather not worry about tracking the history/frequency of an account - remember, the Nacha rules require a validation to be performed the first time a merchant sees a bank account under the WEB SEC code- and just want to minimize risk while maintaining compliance, the account status service can be enabled on the merchant profile level at one of the following thresholds:

First time WEB

Verifies bank status only the first time it is submitted with a WEB SEC code. Satisfies Nacha minimum requirements

First time ANY

Verifies bank status the first time an account is submitted regardless of SEC code

All payments

Verifies bank status on every payment whether it is the first time or not. Great for higher-risk or fraud sensitive merchants