Real-time bank account validation streamlines the consumer experience. But the real secret is preventing those unnecessary returns.
The reasons are plentiful if you’re looking for the upside to using ACH transactions for online commerce. Consumers and businesses alike find them comparatively safe and frictionless, so the volume of ACH transactions continues to soar.
So, when ACH transactions do fail, most notoriously in those RO3/RO4 Nacha return codes, businesses may be inclined to chalk it up as the price of doing business.
There are just two problems with that.
Have you actually added up those costs?
And, Did you know you can eliminate most returns through a simple bank account validation upgrade?
Fat fingers, invalid accounts, and unwanted return scenarios
According to Nacha Operating Rules, a return is a credit or debit entry initiated by the receiving bank or ACH Operator that returns a previously originated credit or debit entry to the originating bank. If the receiving bank cannot post an ACH entry, it must be returned to the sender, including funds and a message indicating the reason for the return and directions for any future handling. All ACH return rates are monitored for Nacha compliance.
While Nacha lists 85 different return codes, two codes may represent the majority of ACH returns for many businesses:
Often the result of “fat-finger” errors when manually entering routing and account numbers, these R03/R04 codes negate transactions and trigger potentially costly return procedures.
Those return costs have a way of adding up
Both the initial ACH transaction and the Return notification incur a hard cost to the originator. Although typically measured in cents, they can comprise a significant annual expense to high-volume businesses.
When an Invalid code requires the company to reach out to the customer to manually correct the routing and account number, the cost jumps exponentially.
There are also the “soft expenses” to consider. Invalidated transactions create frustrated customers as well as workflow disruptions and lost opportunities for the business. User Experience is a key component of online commerce, and unexpected returns undermine the advantage of ACH transactions.
Unprecedented advantage: Ai Validate BD eliminates the most common returns. Automatically.
As a fintech leader in machine learning and predictive analytics, Accelitas set out to literally “break the code” in ACH transactions, developing a patented mathematical model that deciphers how U.S. financial institutions format and structure their accounts, allowing its Ai Validate Bank Data (BD) service to automatically identify and filter invalid bank routing and account number pairs. By eliminating non-valid accounts at the beginning of the payment process, businesses can solve some of the most common reasons for ACH returns, saving significant time and money while improving the customer experience.
If you’re looking to optimize your bank account validation — and there are millions of good reasons to do so — here are the three key considerations:
- Comprehensive Coverage
Ai Validate BD instantly validates 100% of U.S. bank accounts, significantly reducing the most common Nacha return codes (R03 and R04). This real-time, comprehensive coverage ensures fewer payment disruptions, minimizing customer frustration and operational inefficiencies, and directly addressing critical pain points identified by Nacha. - Superior ROI with Targeted Optimization
By strategically targeting and eliminating common ACH return codes, Ai Validate BD optimizes your resources, reducing both hard costs (manual corrections and transaction fees) and soft costs (customer dissatisfaction and lost opportunities). - Enhanced Customer Experience
Ai Validate BD leverages predictive analytics and ML-driven scoring to deliver rapid account validation within your existing workflow. By streamlining onboarding and checkout processes, you enhance customer experience, minimize transaction drop-off, and support consumer choice, safeguarding revenue and customer loyalty.
So, how does a free bank account validation data test sound?
If you think your current bank account validation system could do better, you’re probably right. Let Accelitas give you a free bank account validation data test to find out how Ai Validate BD can deliver just what you’re online business has been missing.
