Bank Account Verification Using RTP and ACH Fallback
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Solution Overview
Problem
Existing bank account verification processes, such as those using Automated Clearing House (ACH) payments, are time-consuming, often taking days to complete and are prone to errors or user abandonment, posing risks for fraud and unauthorized transactions.
Innovation Solution
Implementing a real-time payment (RTP) based verification process that sends a credit transfer with a verification code to the bank account, allowing instant verification upon successful receipt of the code, or falling back to ACH if RTP is not supported, ensuring near real-time account validation.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If ACH micro-deposit verification is used, then bank account verification can be completed, but the process takes 1-5 business days and users may abandon the process
Solution Approach 1:
The patent changes the payment network parameter from ACH (Automated Clearing House) to RTP (Real-Time Payments), transforming the verification process from batch processing to real-time processing. This parameter change reduces verification time from 1-5 business days to near real-time while maintaining verification reliability through the same micro-deposit methodology.
Solution Approach 2:
The system dynamically selects between ACH and RTP verification methods based on real-time detection of which network the bank account belongs to. This dynamic adaptation allows the system to use the fastest available verification path for each specific account, optimizing both speed and completion rates.
2Reliability
If ACH micro-deposit verification is used, then verification can be performed, but deposits may be lost or users may not return to complete verification
Solution Approach 1:
The system performs preliminary detection to identify whether the bank account belongs to an RTP or ACH network before initiating verification. By preparing the appropriate verification method in advance, the system eliminates the need for users to wait days for ACH deposits or abandon the process, significantly improving user convenience while maintaining verification accuracy.
Solution Approach 2:
The patent introduces an intermediary detection mechanism that identifies the appropriate payment network (RTP or ACH) for each bank account. This intermediary layer directs traffic to the most suitable verification path, preventing lost deposits and user abandonment by ensuring the fastest available method is used for each account type.
3Loss of time
If RTP verification is implemented, then near real-time verification is achieved, but requires determining RTP support for each account
Solution Approach 1:
The verification system performs self-service by automatically detecting whether each bank account belongs to an RTP or ACH network without requiring manual configuration or user input. This automated detection mechanism handles the increased complexity internally while presenting a simple, fast verification experience to users.
Data Source
AI summary
Systems and methods for verifying a bank account in near real-time are provided. In particular, a computing device may receive a request to initiate a verification of a bank account. The request includes a source account identifier and a destination account identifier of the bank account. The computing device may further determine if the bank account supports real-time payments (RTP) and verify the bank account in near real-time via a first verification process in response to determining that the bank account supports RTP.