Ideally, every bank account in the U.S. could be validated through a common service before initiating a financial transaction. Unlike countries with national validation schemes, the U.S. does not have a single method that can definitively validate accounts. Therefore, businesses and FIs must leverage a “waterfall” of incomplete solutions, leaving them vulnerable to fraudulent transactions.
This report explains the difference between account validation and account verification, provides an overview of the different types of account validation providers in the U.S. market, and identifies the challenges faced by those trying to solve this problem. It is based on three Datos Insights surveys, extensive conversations and product demonstrations with account validation solution providers, and is supplemented by interviews with regulators and financial institutions.
Clients of Datos Insights’ Commercial Banking & Payments service can download this report.
This report mentions Nacha, FedNow, RTP, and the U.S. Department of the Treasury.
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