By Valerie Bolden-Barrett Updated February 04, 2019
Business owners, landlords and anyone else who accepts noncash payments for their goods or services need to be assured that the funds are drawn from legitimate bank accounts. Account validation can be as basic as calling the bank for verification or as state-of-the-art as entering data into a software program.
Manual Validation
When a customer or client pays with a paper check, you have the option of simply calling the issuing bank and confirming that funds are available. While manual validation has the advantage of not requiring the purchase of proprietary software and third-party services, it can be slow and cumbersome. This makes it unsuited to busy retail environments in which shoppers want to get through the checkout line as quickly as possible.
Ask for Identification
Follow the standard practice of asking for identification when your customer presents a check for payment. The most common and universally accepted forms of ID are an unexpired driver's license, passport or state-issued ID card. Compare the information on the check with the ID, noting any discrepancies.
Call the Customer's Bank
Call the bank listed on the customer’s check. Identify yourself and your business and state the reason for the call. Ask the agent what information the bank needs for verification. This is typically the customer's full name, address, and routing and account numbers as they appear on the check. The routing number, which identifies the bank, is the first set of numbers in the bottom left corner of the check. The account number is the eight-digit series of numbers to the right of the routing number. The bank may require additional details to verify the customer's account and your status as the payee.
Record the Bank's Response
Record the agent's responses for future reference. The agent may confirm the account is valid and that it covers the purchase amount. However, depending on the bank's privacy policies, he may confirm only the account's authenticity.
Electronic Validation
Electronic validation services allow for the quick processing of checks, essential when making a quick sale. There are different degrees of verification available, including those that scan checks, allowing the customer to keep the check in her possession even after the purchase. Other services may guarantee the check's value: If the check bounces, the validation services will cover the amount owed.
Choose a Validation Service
Subscribe to a bank account validation service. These largely fee-based software tools may be downloaded, accessed through a Web application or integrated into the user's internal network. Check validation programs work by comparing check information to databases that
Log-In to Your Service
Log on to your software program and input the information as instructed.
Other Considerations
- Not all banks verify account balances. A bank may even require you to appear in person to get financial information.
- Sufficient funds in a bank account won't guarantee a check's clearance. During the lag time between the purchase and check-posting dates, a customer could have other checks pending, stop payment on your transaction or close the account.
- Requesting financial information can compromise the security of customers' accounts. The Small Business Administration advises that you protect customers' data.
FAQs
There are many ways to verify a bank account. You can ask the account holder to provide a bank statement, certificate, or a canceled cheque, which you can get verified with your own bank. This may take 1-3 business days.
How do I know if my checking account is valid? ›
The Routing Number Lookup tool can help verify the Routing Number is associated with a specific financial institution. You can also find routing numbers on the websites of most financial institutions or by calling them directly.
How do you validate bank details? ›
There are four main ways to verify a bank account, each of them has its own pros and cons:
- The user provides a bank statement or certificate. ...
- The user connects bank accounts with your system. ...
- The user makes a micro-transaction and you check the data you receive. ...
- You make a micropayment to your user and they verify a code.
Account validation or Instant Bank Verification is the process of verifying that the bank account number and account details are valid before a transaction is processed.
How to check bank account status online? ›
Online banking allows you to access your bank account from any computer or device with internet access. To check your account balance, log in to your bank's online banking website using your username and password. Once you're logged in, navigate to the account balance section.
How do I know if my checking account is good? ›
Bottom line. In the end, the things that you want from a checking account are convenience (in the form of a good online experience and easy access to your cash) and safety (in the form of FDIC insurance and low or no fees). The best banks offer some additional perks, like interest payments and other financial services.
Can you check your checking account online? ›
You have several ways to check your bank account balance, including logging in to the bank's website, using the bank's mobile app, visiting an ATM and calling the bank.
How long does it take to validate a bank account? ›
It can take between 1-3 business days for you to see the micro-deposits used for verification in your bank account. Once you've seen the micro-deposits in your account, you have about 10 days to complete your bank verification on Remote.
How do I confirm bank account details? ›
This is done through the verification of an identity number (or company registration number) against the bank account number supplied. That the bank account in question is presently open and active. That the bank account in question accepts debit and credit transactions.
How can I check my bank verification? ›
You can check your BVN by simply dialing the code *565*0# using the phone number you used to register your BVN. By following the prompts displayed after you dial the code, your BVN will be displayed on your mobile device for a service fee of N20. The method is fast and doesn't require any internet connection.
Contact branch to update the name as per PAN. Then, re-validate, update the details and submit request for re-validation. Click Re-Validate, enter the correct bank account number and submit the request for re-validation. Click Re-Validate, enter the correct bank account number and submit the request for re-validation.
How to check if a bank account is valid? ›
Call the Customer's Bank
Call the bank listed on the customer's check. Identify yourself and your business and state the reason for the call. Ask the agent what information the bank needs for verification. This is typically the customer's full name, address, and routing and account numbers as they appear on the check.
How can I check if a bank account is still open? ›
If you know where the account was held, contact the bank or provider directly. If not, there are free services you can use. These use your details to track down any missing accounts on your behalf.
How do I know if my bank account is closed or active? ›
How do I know if my bank account is closed? You should receive a notification from your bank if your account is closed. You may notice you cannot access your funds or use your debit card. You can also contact the bank directly to confirm whether your account has been closed.
Do bank accounts expire if not used? ›
Inactive Accounts
Generally, an account is considered abandoned or unclaimed when there is no customer-initiated activity or contact for a period of three to five years. The specific period is based on the escheatment laws of each state. […]
How to verify if a bank is legitimate? ›
To help you determine if a website belongs to an FDIC-insured bank, check the FDIC BankFind, a data resource on the FDIC website. You can look up banks by name or website address to verify whether they are a real FDIC-insured bank. Compare the bank name with the web address or URL.
How do I find out the validity of my debit card? ›
On your debit card, there is a date that is listed next to the phrase “valid thru.” This date is the month and year (MM/YY) your debit card is valid until—in other words, the card expires after that day in that month. You should receive a new debit card in the mail from the bank before your current card expires.
