Reliable, Real-Time ACH Account Validation for Property Managers

In the multifamily online payment world, ACH account validation can be tricky and time consuming. Failing to authenticate a resident’s bank information before accepting payments can open the door to returns, even fraudulent activity. Because more and more renters are paying online, apartment operators are wise to offer Automated Clearing House (ACH) transactions. At the same time, they must protect themselves. The most common ACH returns result from closed accounts, invalid account information (or user error) and ineligible accounts. Most returns are due to insufficient funds and sometimes require property managers to confront residents whose payments are in question. Yet the payment method promises to continue to be around for the long term. ACH payments on the rise in multifamily Processing ACH payments are essential to many businesses because consumers prefer the convenience of paying through electronic transfers. A 2019 Federal Reserve payments study reveals that ACH payments accounted for 66.1% of the value of all noncash payments in 2018, up 60 percent from 2015. Two years ago, the U.S. ACH network processed nearly 25 billion transactions at a total value of $55.8 trillion. And the pace isn’t weakening. This year, Nacha, which develops rules and standards within the ACH Network, notes that ACH is on pace to reach nearly 29 billion payments at a value of $71.4 trillion. Multifamily residents and property owners are experiencing similar demand for ACH payments. A July 2020 National Multifamily Housing Council webinar noted ACH payments are most preferred by residents to pay rent. More than half of apartment owners and operators said residents prefer paying rent either through ACH or bank-to-bank transfer over other methods. New ACH account validation rules on center stage With growing volume, ACH account validations are in the spotlight. Beginning in early 2022, Nacha will require merchants to validate a bank account’s routing numbe...