Routing number lookup: enough to prevent all mistakes and fraud?

Having the wrong bank account information can lead to significant financial loss. And with over 27,000  routing numbers in current use, it’s understandable when mistakes are made. However, many streamlined and efficient businesses simply can’t afford to delay or lose payments due to the wrong routing number.

Read on to learn about the three ways to validate a routing number and handle electronic transactions with care. Trustpair verifies this type of banking information against external databases to prevent organizations from falling victim to fraudsters. Request a demo to learn more!

The 3 ways to validate routing numbers

It’s important to note that there are 2 types of routing numbers:

• The ABA routing number, specific to paper check
• The ACH routing number, specific to ACH transfers

Many banks use the same routing number for ABA and ACH. However, very large financial institutions can use distinct codes and have a specific code for wire transfers.

Here are the three ways to do a routing number lookup:

• Find the list of routing numbers
• Find the routing number on a check
• Reverse search the bank

List of ABA routing numbers

Each financial institution has its’ own set of ABA/ACH numbers, depending on region and transaction type. Financial institutions can even have different routing numbers per state or region.

For example, here is the US Bank’s list of states and their corresponding routing numbers for domestic payment transfers:

Find a routing number on check

In the case of paper checks and ABA routing numbers, it’s also possible to find and validate your routing number on the paper check itself. It’s the nine-digit code printed at the bottom left of the check.

But there are several digits printed on each paper check, so it’s important not to confuse the ABA routing number with your account number, or even your check number.

As mentioned, the routing code is made up of nine digits and sits at the bottom left corner of the check. The ABA is printed in magnetic ink known for a process known as MICR (magnetic ink character recognition), ordering financial institutions to read and process check transfers accurately. Therefore, this number should look slightly different from the other areas printed with normal ink.

The account number can be differentiated by its location, which is on the right of the routing number. This refers to the unique identifier for your bank account, while the routing number helps to identify the institution you bank with.

Finally, the check number is simply printed for your own administrative records. It can be useful to note the check number while paying suppliers, preventing vendor fraud, or for auditors to match payment records.

Reverse search the bank with an ABA routing number lookup

In case you have the ABA routing number but not the bank, there are other online services to help find the financial institution. It’s simple – just open the page, input the routing number to the American Bankers Association lookup page and you should find what you need!

Note that users of the ABA service are limited to two lookups per day or ten per month. However, this can be particularly helpful if your business is collaborating with a new financial institution or one that has recently undergone structure changes – as their corresponding ABA might have changed.

Why is checking routing numbers not enough?

Organizations might be thinking that to prevent fraud, all they need to do is make sure that the routing number is valid. But this doesn’t guarantee that the rest of the banking information is valid. On top of that, routing number validation only confirms the bank, not the account-holder identity.

Plus, any fraudster that does their research could bypass routing numbers and other security checks, putting your funds at risk. A single routing number covers any bank in a corresponding area. So, it’s not impossible for fraudsters to learn the bank and open accounts in the same State or with the same bank as the victim they are impersonating.

So, how can you effectively validate the entire banking information with an effective fraud prevention solution before making a payment?

At the very least, it’s important to verify the:

• • • Bank or financial institution name
    • Bank or financial institution address
    • ABA number
    • Entity account number
    • Entity bank account name

It’s also recommended to check the whole account number matches with the actual company. The three steps to take to ensure this match include:

• • 1. Checking the company exists and is active.
    2. Checking the account number is valid (this is where your ABA routing number comes into play).
    3. Verifying that the two above data points are correlated.

Manually performing these checks is just not an option. It doesn’t make sense for enterprises with hundreds (or even thousands) of third parties to employ team members specifically to validate this data.

Apart from the wasted hours, it’s virtually impossible to verify these details without software. Not to mention that international third parties have totally different data points and supplier risks to manage, leading to confusion and further roadblocks.

Instead, automatic account validation platforms like Trustpair offer a better choice. Trustpair checks all banking information (even for international vendors) thanks to robust external data sources and secures your financial transactions.

Working for electronic transactions only (not checks), Trustpair ensures that businesses can be confident in the transfers they make. Pay to the right supplier with the correct amount, and block the efforts of fraudsters to commit wire transfer fraud.

Learn more about how to prevent payment fraud in our latest fraud study!

When do you need a routing number lookup?

Routing numbers are codes that help to identify banking institutions in the United States.

Every bank in the US has routing numbers, but different regions have separate codes. This makes it easier to identify the right location or bank branch for a payment. The routing number is also integral for sending checks to the right Federal Reserve processing center. They ensure that any wire transfer or direct debit payment ends up in the right account without being subject to extra fees (not necessary for credit cards).

They’re essential for expediting swift transactions and preventing banking errors. If the wrong routing no. is used, the IRS reports that money can be delayed. It can even be deposited into somebody else’s account. Therefore, it’s imperative to get the routing number right for any check payments.

What’s the difference between an ABA and an ACH routing number?

ABA stands for American Banking Association, so it refers to the corresponding financial institution that processes and receives check payments. Alternatively, ACH payments refer to the Automated Clearing House, or the electronic payments network (similar to direct wire payments).

Most banks in America actually use the same nine-digit codes for ABA and ACH. But in some cases (regional institutions in particular), you might find the digits to be different.

It’s important to note that platforms like Trustpair can verify ACH routing numbers since they’re associated with online payment transfer methods. In most cases, ACH and ABA routing numbers are the same.

To recap: how to do a routing number lookup and why it’s not enough

When making direct deposits with a check, a valid ABA routing number is required. Companies can verify that they have the right ABA number by checking the list provided, looking at their checkbook, or heading to the American Bank Association website. Trustpair validates ACH routing numbers as well as other bank and account details for electronic payments, effectively securing financial transactions.Our services also include detailed analytics about transactions and fraud prevention.