This article is contributed by Jacob Robinson.
You will have probably had to verify your bank account while shopping online at one point or another. It has fast become a necessity for e-commerce style purchases, and rightly so. Not only can it protect you as a consumer, but it is also there to protect businesses and keep everything in line with purchase regulations. Read on to find out more about what bank account verification is and why it is important.
What is Bank Account Verification?
This process aims to prove that you are authorized to use this account for online payments. It usually requires a password, or a confirmation through a banking app to complete a purchase. There are different methods, but the goal is the same – combat fraudulent e-commerce activity and protect consumers and businesses. Companies like Yodlee offer instant bank account verification to help minimize fraudulent transactions. No microtransactions or bank routing numbers are needed. Yodlee has a range of financial-based products and services for wealth management, retail, fintech, and more.
Reasons Why Accounts Need Verification
Why does this process help protect customers and companies alike? There are several reasons why this needs to happen and why it is a common occurrence when buying things online.
To Confirm the Identity of the Customer
Cybercrime is a very real event, and it can often be in the form of stolen financial information. This means that a criminal is using the credit or debit card of another individual. With the additional step of verification, customers can confirm they are the true owner of the bank account, and the transaction should go through smoothly. Proof is normally provided through a passcode, safe phrase, or app verification.
To Protect Businesses from Fraud
Likewise, there is a constant need to protect businesses from fraudulent purchases. This is important to keep in line with legislation and mandated industry regulations. It is not always avoidable, but the added protection of verification certainly goes a long way in helping to combat fraudulent activity. It is also a way for banks to flag any suspected fraud-based activity and raise awareness with the owner of the account by blocking the transaction and freezing all activity until the potential issue is resolved.
To Ensure Money Goes to and From the Right Account
Is there anything more stressful than realizing online payment details are incorrect? Seeing your money sail off to the wrong account, or waiting on a payment that is not coming because you have inputted a wrong account digit is a big frustration. To avoid this, and to help wrongful payments reach the right places instead of the wrong ones, verification can be used. If a bank suspects something is amiss, they will flag it and block it from going further.
Conclusion
Account verification is there to protect everyone whether they are a business or a consumer. Without it, there would be a much higher risk of fraud taking place, and money changing hands under the wrong circumstances.
