ACH Transaction Verification Codes for Account Ownership Checks
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Solution Overview
Problem
Existing methods for verifying customer-provided financial account information, such as using ACH credit transactions, are limited in unique combinations and costly, necessitating a more secure and cost-effective solution.
Innovation Solution
Utilizing debit and credit transactions with embedded verification codes in statement descriptors, allowing customers to verify their account information through matching these codes, and optionally using real-time checks on routing and account numbers.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If two ACH credit transactions are used for verification, then account ownership can be confirmed, but the number of unique verification combinations is limited to about 10000
Solution Approach 1:
The patent changes the parameters of the verification system by introducing statement descriptors with embedded verification codes into the ACH transactions. This allows for a much larger number of unique verification combinations compared to using only transaction amounts, thereby increasing the versatility and security of the verification process while maintaining reliability.
2Reliability
If ACH credit transactions are used for verification, then account information can be verified, but the cost to the sending party increases
Solution Approach 1:
The system uses the existing ACH transaction infrastructure to carry out verification, leveraging the normal transaction processing mechanism. By embedding verification codes in statement descriptors of regular transactions, the system performs verification as a byproduct of normal operations, reducing additional costs while maintaining verification accuracy.
3Adaptability or versatility
If verification codes are embedded in statement descriptors, then unique verification combinations increase, but transaction processing complexity increases
Solution Approach 1:
The statement descriptor field in ACH transactions is used for multiple purposes: it provides transaction identification and now also carries embedded verification codes. This multi-functionality allows the existing transaction processing system to handle verification without requiring a completely new system architecture, thereby limiting the increase in processing complexity.
Data Source
AI summary
Embodiment of the invention describe methods and systems for verifying customer supplied financial account information verification using debit and credit transactions. In some embodiments, these methods include electronically transmitting an electronic debit and credit transaction to the customer financial account, based on the customer supplied financial account information. The method also includes electronically transmitting a first statement descriptor, as part of at least one of the electronic debit transaction and the electronic credit transaction, that includes a first verification code. The method also includes electronically receiving, from the customer, a second verification code, and comparing, by the computer system, the transmitted first verification code with the received second verification code with respect to each other. The method also includes verifying, by the computer system, the customer supplied financial account information based on the comparison of the verification codes.