Verify account and account owner information in real-time while maximizing customer experiences

By Lawrence Pannell, Early Warning, Senior Manager of Partner Enablement

According to the Association of Finance Professionals (AFP), payment fraud affected 74% of its corporate members and prospects in 20201 and account takeover losses rose by 72% over the prior year2.

Why is this important?

As attempted payment fraud continues to rise, the risk to your organization grows exponentially. Additionally, fraudsters have become highly sophisticated and traditional account verification methods are inadequate, costly, and inefficient.

In addition to mitigating fraud, organizations – such as corporations and government agencies - need to increase their operational efficiency without disrupting their customers’ experience.

To help with mitigating fraud, the industry is implementing mandates. One such mandate, the Nacha WEB Debit rule, is helping to drive the change.” In simple terms, the rule change supplements the existing rule that was located in the guidelines and explicitly requires that originators conduct account validation the first time an account number is used for an online debit.

But, what can organizations do to increase their efficiency without disruptions to their customers?

In a recent Early Warning webinar, Reducing Operational Inefficiency and Fraud Risk Through Compliance with Nacha’s WEB Debit Rule, 87% of attendees felt that it was very important to consider the customer experience when selecting an account validation solution.

In my opinion, understanding some of the different types of available account validation methods will help to find the right solution for your organization.

Types of Account Validation Methods

  • Just “risking it.” With the high exposure to fraud, companies that choose to do nothing to validate the accounts for online payments could face an increased risk for fraud added to a potential fine for noncompliance with the Nacha WEB Debit Rule change.
  • Micro-challenge deposits. Micro deposits is a high friction, multi-day process and are deposit transactions that involves depositing a small amount of money into an account via an ACH to verify the account ownership and information.
  • Credential login. While credentials help with logging in to an online account, it is another high friction process. According to Infosecurity, 60% of victims had reused at least one password across multiple platforms3 and fraudsters exploit this weakness with compromised credentials to commit account takeover.
  • Mailing in voided checks. As with the other verification methods, requiring customers to mail in a voided check increases in friction.
  • Real-time passive account validation. A real-time passive account validation method is one that validates an account in real-time while simultaneously identifying high-risk payments.

The key to maximizing experiences with customers, especially with electronic payments, is to reduce the friction when validating an account. The best authentication method is one that occurs in real-time and provides passive verification, which allows you to comply with the Nacha rule without disrupting the customer experience.

There are solutions like our Real-time Payment Chek® with Account Owner Authentication (AOA) that, with a single inquiry, validates and authenticates ownership of an account. It helps protect organizations from fraud while reducing operational inefficiency and also meeting regulatory requirements.

To learn more about our account verification solution, contact us by requesting a meeting.


1Payments Fraud and Control Survey Report: Highlights. AFP, 2021.

22020 Identity Fraud Report, Javelin Strategy & Research, May 2020

3How Much Data Was Leaked To Cybercriminals In 2020 — And What They’re Doing With It. Forbes, April 20, 2021.

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