Risk Mitigation For Your Business: Checking Account Ownership Authentication Systems

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Risk Mitigation For Your Business Checking Account Ownership Authentication Systems

Risk Mitigation: Compared to the inherent authorization aspects of credit cards, ACH/electronic check payments  necessitate the use of a Checking Account Ownership Authentication System(AOA) to minimize payment acceptance risks.

ACH Verification & Credit Cards

Credit card verification simply ensures that the business is paid upon sale by verifying that a customer’s credit card has sufficient funds at the point of payment, and then reserves the funds for settling the balance.

For ACH payments, a Checking Account Ownership Authentication System is necessary in order to mitigate risks at the point of sale. An AOA system allows businesses to confirm that an account is open and in good standing before the account is incorporated into a recurring billing plan, meaning any data entry errors, unforeseen account closures, or fraud can be identified before the sale goes through. Customer frustration can also be reduced via automated follow-up on potentially incorrect checking account information.

AOA At Work

Let’s take, for example, an insurance company that issues a $20,000 binding policy with invalid customer information. It can take up to a week for this incorrect information to reveal itself – thereby revealing that writing the policy was an error.

Imagine the customer claims the full amount immediately or a few days after the policy is written, and because the policy is bound the company loses $20,000 with no guarantee of recouping the loss. This all could have been avoided for a small fee – fees typically range from just $0.80-1.25.

Customer Considerations

Third-party entities often acquire new customers for businesses in exchange for a referral fee. The referral is often paid instantly, so if the customer’s payment fails due to incorrect or bad data the business is left out of pocket.

Without a Checking Account Ownership Authentication System, a new customer must rectify their mistake (a major pressure point for customers). Customers should be required to do minimal work after-sale, and this can cause distrust in your company as it points to inefficiency in your operations – and frequently, this can cause customers to seek other services.

The Bottom Line

An AOA system not only improves the customer experience, but is a safeguard that protects your business from bad check data, and prevents additional labor, and potential lost revenue. Agile Payments can help with any AOA needs. Get in touch today