Check Verification – A New Tool to Lower Your Risk of Losing Money
23 Oct 2014 by Victory Payments
Check verification is a powerful tool that businesses can use to significantly reduce the risk of loss associated with accepting checks or processing ACH payments. The most common losses stem from NSF checks or ACH items being returned as NSF (non-sufficient funds). But there’s more to consider..
You also have to factor in the administrative costs to collect on outstanding receivables and the cost from your processor or bank for those returns (which can be hefty).
It surprises me how many businesses are still running naked and blind when it comes to accepting these forms of payment and not using any type of verification on the front end before the payment is processed and before goods and services are delivered.
We frequently see this problem occurring when merchants are using their bank to process ACH payments or plain vanilla processor that doesn’t offer these types of verification tools.
So the effects can be a colossal waste time, effort, money, and resources. Not to mention the potential risk of losing your processing relationship if ACH returns are too high.
Fortunately there’s a solution..
Quite simply, check verification is a service you can use to validate and verify customer bank accounts and the status of those accounts. This insight gives you decision making power that can lower your risk of losing money.
These tools are available and affordable for small merchants and are also used by the largest insurance companies and loan servicing companies processing tens of thousands of payments each month, for example.
Check verification can be used as an error protection tool if you are manually entering in bank routing and checking account data. Often referred to as “fat fingering” a good verification service can eliminate those errors up front so those transactions never enter the payment system. It can be done in real-time so the problem can be corrected faster.
But the big impact check verification can have on reducing your risk of losses in being able to query the status of your customer’s bank account before you process a payment.
For example, our check verification services can determine, in real-time, the status of your customers bank account as of the open of business that day. This can help you make better payment acceptance decisions based upon real-time responses. Some of the reason codes include: Closed, Pending closed, Open Valid Account, Positive balance, Stop Payment, Repeat offender or NSF, Account with recent returns, and more.
And not all verification services are created equal. Bank coverage is key. One of the reasons companies choose to work with ACHcheck.com is our service includes the largest non-participant bank network in the country. We’re talking about smaller banks and credit unions. This translates into approximately 25% better coverage than any other verification network in the country. And that means an approximate coverage of between 90-95% of the banks in the U.S. that you can query. Remember that funny bank commercial with the children sitting around a table and the guy says….would you rather have less or more?
This tool can be used in a brick and mortar location on a manual, one by one basis or in high volume API environment where you’re getting responses back in milliseconds.
Better data means better decisions. And better decisions mean reduced losses and more profit.
As I always say the proof is in the pudding. Call us today or submit a request now and we’ll set you up with your own trial account for you to test drive. Run 100 live verifications at no cost. You be the judge.
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