ACH Web Debit Account Validation Ready One Year Early

Transact has completed preparation for a new National Automated Clearing House Association (Nacha) WEB Debit Account Validation Rule that requires bank account number validation to be a mandatory part of fraudulent transaction detection when processing ACH payments.

The Rule was originally scheduled to go into effect on March 19, 2021, before a one-year, COVID-related delay. Transact elected to keep the original schedule and is fully compliant one year early.

Transact has partnered with Microbilt, a Nacha approved commercial validation service, to fulfill new regulatory requirements. By introducing this service, we will help reduce returned transactions and provide a more streamlined experience for students with real-time notifications and account processing.

Global deployment of ACH account validation services to production environments was completed on March 19, 2021.


Web Debit Account Validation Rule FAQ


Does the ACH account validation check other criteria such as sufficient funds or account owner details?

No,  ACH account validation only checks the account number at this time.

If a student/parent sets up an eRefund account and a refund has been made, will that be considered sufficient validation to allow the user to enter the same account number for payment subsequent to the refund?

Nacha considers a previous WEB debit to be sufficient validation, but unfortunately, an eRefund (i.e., credit) does not qualify.

What methods of account validation does Nacha deem as sufficient? How is Transact conducting account validation?

Nacha has stated that they do “not consider a fraudulent transaction detection system that does not include an account validation component as sufficient.”

Recognized means of account validation include ACH micro-transaction verification, commercially available services, API supported services, prenotification entries, and other commercially viable means.

Transact utilizes commercially available services via Microbilt.

Do Originators need to verify accounts for existing web debit customers?

No, this rule only applies to new web debit account numbers.

Each institution is responsible for the Nacha standards. Is it correct that this will not be validated by Transact?

Account validation will be provided for both SmartPay and Non-SmartPay clients.

Do these new requirements also apply to eRefunds or just payments that the school receives?

The current requirements apply only to ACH WEB debits from a bank account. eRefunds will not apply to the ruling.

How is the identity of the individual being debited verified on the website?

Payors are verified by the school (i.e., they are required to log-in to their student account) prior to being passed to Transact Payments.

How is the validity of the Routing Number provided by the Receiver verified before payment is processed?

Transact updates the internal list of valid routing numbers with data from the Federal Reserve Board on a regular basis.

How is the validity of the Account Number, for first use of an account, or changes to the account number verified?

We will be using Microbilt’s RVD product which contains proprietary information regarding valid account numbers. Microbilt is a Nacha Preferred Partner.