Account Validation

*This course is not eligible for AAP or APRP Continuing Education Credits

Consumer bank account holders leverage the ACH Network to make electronic payments for many reasons such as bill payment, online purchases, subscriptions, and person to person money transfers. Businesses including governments and other types of organizations leverage the ACH Network to make electronic deposits into consumer accounts for payroll or disbursements. Businesses and consumers rely on the efficiency and speed of ACH payments and therefore it is a priority that processes be in place to avoid processing exceptions and fraud. Account validation is a valuable “pre-payment” tool that can greatly reduce exceptions and provide end users with confidence and a positive digital payment experience.

George Throckmorton will begin by providing the definition and description of account validation for ACH transactions. This will include the history of account validation for ACH transactions and the continued evolution of tools and technology. With a baseline understanding of account validation established, he will then discuss why account validation is considered a best practice for businesses and the value to consumers. Nacha’s ongoing commitment to the safety and security of the ACH Network resulted in a Nacha Operating Rule specific to account validation for online and mobile transactions. Amy Morris will provide a detailed overview of the rule and compliance considerations. Amy will discuss “commercially reasonable” methods for account validation and following that, George will demonstrate the various methods for account validation available to originators. Finally, he will review decisioning and next steps for originators to implement best practice processes and procedures that ensure compliance and desired user experiences.

Questions answered by this session:

  • What is account validation for ACH transactions?
  • What are the benefits of account validation for businesses and consumers?

Prerequisites (if any): None 

Level: Beginner

Learning Outcomes:

  • Understanding of Account Validation for ACH transactions
  • Comprehensive review of the Nacha Rule for supplementing fraud detection standards for WEB debits
  • Understanding of account validation options for compliance
  • Assessment of current account validation processes and new process or technology planning

Skills Covered in this Course: Regulatory Compliance, Risk Management, Consumer Protection

Instructors:

George Throckmorton, Nacha

Amy Morris, Nacha

Key:

Complete
Failed
Available
Locked
[Recording] Introduction to Account Validation
[Recording] Supplementing Fraud Detection Standards for WEB Debits