Payment Account Transition – Bank Account Verification

With the coming of May, we are now required to verify bank account information. This is part of updates to the Financial Crimes Enforcement Network (Fincen) rules that banks and credit card processors belong to and are required to comply with. This also coincides with our transition to a new payment processor. As we migrate accounts we are taking advantage of new software that our new payment processor provides to us for free (it would have cost us $20,000 per month to use the same software with the old system) to help with the migration and validation of bank accounts.

For some accounts, the migration can happen automatically since the system can validate with our customer’s bank that these three things match:

  • Bank Routing Number
  • Bank Account Number
  • Name on the Bank Account

Unfortunately, there are two cases where the validation fails:

  • One or more of these items not matching
  • Customer Bank does not support the automated system (about 10% of banks)

When there is a lack of a match (and we suspect that we are receiving a number of errors based on a mismatch of names – for example I might enter “Bob Bickel” for my Pay To name, but the name on the account might be Robert Bickel (although the algorithm is smart enough to match that).

New Accounts

When new payment accounts are created, we are doing this check. It takes time to do the check, and you will see a wait screen that looks something like this (we are going to be adding something to help pass the time):

If the automated check is successful, then you will see a message that looks like this:

If the bank check is unsuccessful, you will see an error message:

Clicking the big red button brings a popup asking you to upload a document so the data can be manually checked:

The document you upload or take a shot with your camera with should be an official bank document, such as your bank statement, a letter from your bank or a voided check. It will take at least 24 hours for the validation to happen, and we may ask for additional information or help in determining the proper name on your account. If it matches, then we will approve the payment account pending review of other pertinent information.

Existing Accounts

All existing accounts will be going thru this check as well. If there is a match, then everything will flow smoothly. If there is not a match, you will receive an email that looks something like this:

Clicking the link will bring you to the same document upload screen:

For migrating accounts, we have a number of months before bank match issues need to be cleaned up properly, but we encourage our customers to take care of this required step when notified in the coming weeks.

We know this may seem onerous, but it is for the benefit of all of our customers as well as the financial system to ensure high quality data and financial enforcement. The best way to think of this is that if you were to set up a bank account, they would want similar information and validation with proof of name from several sources, etc. We appreciate your patience and support.

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