When onboarding new customers to your business, risk is everywhere. Between needing to validate the authentic ownership of that account, validating the bank balance, going through account history and historic repayment, and simply checking that the bank account is in good standing, a lot can go wrong.
That’s why Instant Bank Account Verification could save you time, hassle, and risk — particularly for companies or organizations that operate ACH-based recurring payment plans. We’ll show you why in this article.
How Does Instant Bank Account Verification Work?
As a customer interacting with a new business, you’re redirected to your bank login through a pop-up or lightbox. Upon logging in, the business can piggyback this, and through an API pull the account data of the customer, thereby being able to validate the bank balance of the purchaser.
This is where Instant Bank Account Verification operates and is useful. If your business doesn’t have authorization measures in place, having a strong Instant Bank Account Verification System is vital to help reduce risks around payment acceptance. This is particularly important due to the generally troublesome (but ultimately highly important) nature of client onboarding, both for the business and the customer.
Think about it: how many times have you inputted data incorrectly in your life? When the customer’s putting in their bank account/routing info, the margin for error is huge — and using Instant Bank Account Verification can help you to reduce the risk and subsequent problems that arise enormously.
What Other Risks Can Instant Bank Account Verification Reduce?
First and foremost, Instant Bank Account Verification helps to banish errors due to incorrect data entry, either of the customer’s account number or routing info. It also helps to spot when there are insufficient funds in an account, stopping the transaction at the point of sale and preventing any further work for your team.
The instant verification process also helps to spot and prevent troublesome transactions, either through the customer using fraudulent information or through indicating poor loan history on the consumer side.
Finally, Instant Bank Account Verification can help to reduce payout risk, specifically in the case of things like insurance claims or returned fees. This will make sure these payments make it back to the right account.
How Does Instant Bank Account Verification Vary From Previous Verification Checks?
One look at former verification checks is all it takes to see why Instant Bank Account Verification is the way to go. Previously, using a ‘pre-note’ was the standard: a zero-dollar inquiry that went to the customer’s account. Then, you would wait for days on end to find out whether a bad account notice came back. While this confirmed a good account, it didn’t do anything by way of confirming ownership, history, or current balance — and it took forever.
Then, microdeposits came into play: businesses would have to send tiny amounts to the customer and ask them to confirm this amount. Not only did this only confirm validity again, but it was also cumbersome for the customer.
Other methods of checking accounts came in the form of negative databases, which could throw up accounts that had written bad checks. But the problem here was that a bad check could have been written years ago and your data’s out of date — or, it was written yesterday, and hasn’t made its way into the database yet. So, businesses then turned to Real-Time Check verification tools, which were much better — but noticeably, don’t allow you to authenticate account ownership or check balances.
While the latter option can be useful for smaller or lower-risk businesses (due to an overall lower cost), it’s pretty easy to see that basically all of these options pale in comparison to an Instant Bank Account Verification tool. One simple integration allows your business to safeguard against risk and keep your customers’ onboarding smooth, meaning everybody’s happy.
The Bottom Line
By integrating Instant Bank Account Verification, you’re streamlining processes for your business and your customer, and reducing risk significantly. For more information about how to incorporate Instant Bank Account Verification for your organization, contact Agile Payments today. Our team can help you take the next step in your business’ growth.