There are two ways to connect to a bank account for ACH payments:
(1) Account/Routing Numbers:
Users submit their account/routing number.
- For CREDIT only accounts, this is the only step.
- For CREDIT-AND-DEBIT accounts, you must verify the account with micro-deposits.
Pros:
- Supports business accounts
- Covers all US bank accounts
Cons:
- Requires micro-deposits to verify CREDIT-AND-DEBIT accounts.
- Limited Risk Mitigation Tools -- We can't access account information to verify account ownership
Best for:
- Business Accounts
- Consumer accounts held at smaller banks & credit unions
- Receive-only accounts (ex: payroll, direct deposit, etc)
(2) Online Logins:
Users supply their online banking logins:
- Select a bank
- Supply online banking Username/Password
- Verify accounts with MFA question(s) -- If the user has MFA setup for their bank account
Pros:
- Instantly verifies the account (i.e. no micro-deposits)
- Easier for consumers (No need to dig up account/routing numbers)
- Reduces Risk -- We check things like account owners, recent balances & transaction histories to verify account ownership & reduce risk of insufficient funds
- Adds multiple accounts at a single bank
Cons:
- Does not support business accounts
- Not all consumer accounts are supported (View list of supported banks)
Best For:
- Consumer Accounts
- High Risk Platforms
- Mobile Applications & others that require quick onboarding experiences
Jj