How to Verify an eCheck
If your business accepts payments, staying up to date about check verification is crucial. This is especially important as technology evolves and eChecks and ACH payments are becoming more prevalent. Accepting a bad or fraudulent check that bounces can cost you money.
You can verify eChecks manually or through an automated process. Both methods can help you verify if the check is valid, but you won't always be guaranteed there's money in the account when the check clears. Adopting robust options to verify eChecks and ACH payments can assist in authenticating captured data before processing and authorization.
Manual eCheck Verification
You can manually check for verification by examining some crucial details of the sender. Ensuring they have valid proof of identity can be the first step, after which you can look for any suspicious signs around the eCheck itself. Verify that the amount you're due is accurate, as well as the security features that accompany the eCheck. Things to look out for can include a unique security code, eCheck verification number or a watermark accompanying the eCheck.
With ACH payments, checking for the correct transaction details and ensuring that the account holder authorized the payment can help safeguard transactions. You can also call the relevant bank to ensure the payer is legitimate.
If you deposit the check and there's enough money in the account to cover the transaction, you'll have to wait a few days before it clears. The account holder can withdraw all their funds during this window. If you deposit a check and there's no money, you'll have to pay bank fees and attempt to retrieve the funds you're owed.
Automated eCheck Verification
You can do an automated check verification through the original payer's bank. These are only partially helpful, as the bank only flags accounts with a history of writing bad checks. The bank doesn't divulge whether the account has the available funds.
Factors to Consider When Verifying eChecks
When your business receives an eCheck or ACH payment from a customer, there are various factors to remember before you deposit it. A valid bank account with no funds leaves you with bank fees. You'll also have to take further steps to retrieve your funds for products or services rendered. Fraud, manual errors and bad checks can cost your business money and delay payments received.
Consider the following elements when accepting eChecks and ACH payments from customers:
It's important to verify whether the account exists to mitigate fraud and financial loss.
You could be working with a bad routing number or a blacklisted TRN, which can be expensive and delay payments.