For businesses that accept electronic checks as well as physical checks, electronic check verification is a valuable tool that can significantly reduce the rate of fraud.
In simple terms, eCheck verification is the process of verifying payment to ensure it’s legitimate and can be processed by validating the customer’s checking account prior to the completion of the transaction. Verification can be used for both in-person transactions and online transactions. With fraud as prevalent as it is, eCheck verification is more important than ever.
The importance of online check verification
One of the main advantages of electronic check verification is its speed. ECheck verification can take as little as a few minutes to verify account information but in some cases, it can take a few hours if there are discrepancies involved. These few minutes can be all it takes to significantly reduce the rate of fraud which has been an increasingly prevalent issue among checks and ACH debits.
Unfortunately, some banks won’t allow over-the-phone check verification to reduce the risk of fraud. In this case, you will need to go to the closest branch of the bank to complete the verification process. Completing the check verification process in person will typically be a longer process — the average in-person check verification process will take about two business days.
How can I verify a check?
Now that you know what check verification is and why it’s so important, let’s break down how real-time check verification works:
- Although you can use other banks, it’s best to use the bank that issued the check to complete this process.
- Locate the name of the issuing bank on the front of the check. If you can’t find the name of the bank, you can contact the account holder to ask for the name of his or her bank.
- Once you’ve identified the name of the check-issuing bank, visit the bank’s website to acquire its customer service number.
- When you have the customer service agent on the line, explain that you are looking to verify a check.
- You will then need to provide the customer service agent with the routing number and account number. Both numbers should be displayed on the front of the check.
- Lastly, provide the customer service agent with the amount written on the check.
Once you’ve provided all the necessary information, the customer service agent will match the account number and routing number to the ones listed by the original account holder (the one who first issued the check) to verify the account is active and contains sufficient funds to complete the transaction.
If you’re looking for immediate check verification, it’s best to verify funds over the phone because verifying checks in person at a bank branch usually takes a few business days to process.
Can you verify a check online for free?
One of the most frequently asked questions is, can I verify check funds online for free?
While you can’t verify a check online for free, you can call a bank to have a customer service agent complete this process which is usually free of charge.
You can also use the verification services provided through a merchant account but keep in mind, merchant service providers often charge subscription fees and flat fees.
Average check verification services will charge $0.15 to $0.25 per transaction, but the monthly statement fees can range between $20 to $50 per month. These prices vary depending on the organization issuing the merchant account.
If you’re looking for free check verification, physically going into a bank branch (preferably the one listed on the check) to complete the verification process is the cheapest way to go given that it’s often a complimentary service.
Verifying a physical check vs. an electronic check
Verifying a physical check can take a few days for the funds to be transferred and can sometimes take a bit longer depending on the volume of daily transactions your business processes. Whereas, eCheck verification tends to be a bit of a quicker process in facilitating electronic fund transfer (EFT) payments to your bank account. Once submitted eChecks typically take around 24 to 48 hours for banks to verify the payment.
Electronic check verification can greatly reduce a merchant’s risk of check fraud since their verification process tends to be significantly more secure than physical checks thanks to its built-in encryption. eCheck payment processors also use tools that confirm your bank account number, bank account status, identification information, and sufficient funds.
Physical checks can be dangerous if you lose them or if they’re stolen because of the sensitive information that resides on the check itself. Businesses that use traditional lockbox payment methods run the risk of being exposed to intentional fraud and accidental threats from bank employees/contractors that handle processing tasks. If this sensitive information lands in the wrong hands, this can mean bad news for the account holder. An encrypted eCheck makes it significantly more difficult for fraudsters to acquire that sensitive information.
Cashier’s checks can also be verified the same way as physical checks. Simply contact the check-issuing bank, provide the service agent with the necessary information, and you’re good to go!
Now that you’ve explored how to verify a check, you can learn more about who can actually carry out this service.