Bank Account Verification Important For Small Businesses: Identity theft continues to be a serious issue for all businesses that accept digital payments. Bank account verification is one of the best ways to stop this type of fraud. Bank account verification allows the business to know whether the person using a payment option is its legitimate owner. In this article, we will be looking at critical reasons why you should employ it in your business.
Reduce Risk and Fraud
A major reason for using bank verification services is that they help reduce fraud and the risks associated with fraudulent activities. Businesses can quickly verify that the person using the payment option is its owner.
Additionally, these services help ensure the validity of the accounts and their standings to reduce risk on the business’ part.
Businesses can separate paying accounts into different risk tiers for better management. Accounts and payment options that look riskier can be segmented so the business can do additional verification while less risky accounts and payment options do not have to undergo this additional scrutiny.
National Automated Clearing House Association (NACHA) is the body responsible for transactions done through the ACH network. ACH payments are secure in addition to providing businesses additional benefits.
To comply with NACHA rules, businesses must put bank verification services in place. By complying with these rules, businesses help the ACH system run more smoothly, which is more beneficial for customers and businesses.
For businesses that transact with other businesses, account verification builds trust between you and other businesses. These businesses know the accounts they are dealing with are yours and that you have enough funds for transactions with them.
Because of this, bank verification can make it easier to do business with other businesses in the future. Technology has advanced so far such that businesses can do bank verification in mere seconds instead of the weeks it used to take in the past. Companies like Yodlee provide both app and API endpoints for bank verification to make things easier for businesses. Yodlee is also a data analytics and aggregator platform that develops fintech solutions for individuals and businesses. Their products help individuals and businesses achieve better financial outcomes and are used in fintech, retail, open banking, financial wellness industries, and wealth management.
Reduced Friction for Customers
When onboarding new customers, a business has to ensure the process has as little friction as possible. If customers have an issue during this process, they are likely to leave and never come back.
Bank account verification services verify and authenticate transactions in seconds, which helps stop customer churn when making a payment. Customer churn at this point causes businesses billions of dollars every year, and you don’t want your business bleeding money because the verification process took too long.
Bank verification is necessary in a world where more people are turning to digital payments. Businesses can reduce fraud, ensure a smoother experience, and comply with NACHA rules and regulations by having the proper verification systems in place.