Payments API provider Orum has built a product on top of the new FedNow rail to instantly verify bank accounts.
Called Verify, the technology determines within 15 seconds whether any US-based consumer or business bank account is open and valid before initiating payments.
Orum says businesses have used a range of antiquated solutions to verify bank accounts, including slow microdeposits that have to be inputted by each user; batched historical data that fails to reflect intra-day changes; and the manual entry of end-user login credentials.
While credential-based verification has become an increasingly popular alternative in the consumer space, this approach is insufficient for B2B payments, says the company.
The recently launched FedNow allowed Orum to build technology that taps the new payment rail to provide real-time account information to businesses. The rich data is sent automatically back to the business via a webhook, providing real-time results and eliminating the need for a customer to be involved in the bank account verification process.
Stephany Kirkpatrick, CEO, Orum, says: “Failed payments cost the global economy over $100B each year. Lost time verifying accounts equals lost revenue and ultimately lost customers. This is especially true for business bank accounts, which are notoriously difficult to verify.
“Businesses need confidence they are debiting or crediting a real account to ensure the payment lands safely in the bank account, but most solutions today are slow or don’t include coverage for all B2B use cases. Verify - built on top of FedNow - has changed this equation, making it now possible to verify any type of bank account instantly.”