Didyou know

Check Verification is a great tool for merchants accepting ACH and Direct Debit payments to help reduce bad debt risk.

Check Verification typically works by first making sure the account and routing numbers provided are valid, that it comes from a real account and that the account is an open Demand Deposit Account (DDA). The next step is to determine if the account is already overdrawn and to check the account number or account holder against a database of bad check writers.

Considerations When Implementing Check Verification:

When accepting checks and debit cards a verification service should be all that you need. Check guarantee services, in addition to using a verification service can actually cost you more money to process. Unless you yield a high sales volume each month to cover the extra cost for using a guarantee service, just stick with verification.

Check Verification with Conversion means that not only is the check Verified but it is also "converted" into electronic funds, this means that you do not have to deposit the check into your checking account; the funds will be deposited into your checking account for you automatically

 

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Check Verificationtechnique overview

Check Verification is a process that screens checks and check writers to assess the risk associated with taking it. These services typically will check to make sure the account is open, determine if the account has had bounced checks before and it will check a "negative database" of "bad check writers".

Typical information Check Verification can provide:

 

  • Account Closed
  • Stop Payment
  • The account is currently in an NSF balance
  • Non DDA Account
  • Invalid Account Number
  • Invalid Routing Number
  • The account doesn’t exist
  • Stolen/Forged/Fraud

How does it work?

This service is performed using a real-time internet process to access the account information and compare the new transaction against the list. If the customer has a history of bad checks, the transaction will be declined. If they are not in the database for bounced checks, they are approved

How do you use the results?

Accounts that come back as invalid, fraudulent, closed, or are currently in a Non-Sufficient Funds balance will not be able to make payment for the transaction and the order should be stopped. Customers that show up on the negative database of bad check writers represent a much higher risk for bad debt.

AdditionalResources

  • Introduction to ACH Payments.

    Covers the ACH process flow defining each of the "payment players"; reviews payment concepts such as clearing times, reversals, NSF, push and pull options, good funds and bad debt risk.

  • Introduction to Ecommerce Fraud Fundamentals.

    Provides participants foundation level knowledge about the theories, best practices and terminology surrounding electronic payment fraud. Presented in a standard format covering the history of eCommerce Fraud, consumer fraud, merchant fraud, fraudster motivation, fraud trends, identity verification and phishing.

  • Ecommerce Fraud Moving from Tools to Solutions.

    This session covers what constitutes a fraud solution and categorizes the many types of third party fraud tools. The course outlines the common terminology of fraud solutions and describes the capabilities needed to implement a fraud solution.

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