Valid ACH routing numbers: are they enough to prevent errors and fraud?

valid ach routing numbers

Last modified on October 27th, 2023

REJECTED: payment returned – valid ACH routing number not present.

Recognize this? Over the years, many organizations have seen electronic transfers redirected back into their accounts after failing to input the right ACH code. This creates delays, and can also strain relationships with a business’ third parties, as they must carefully comb back through the payment and transfer information. But it’s better than the alternative – which is a complete financial loss.

Without a valid ACH routing number, companies not only make mistakes like these but also fraud. Rely on Trustpair to thoroughly check account information and prevent these risks. Request a demo now!

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How to check if ACH routing numbers are valid?

An ACH routing number is attached to every electronic payment, from wire transfers to direct debits. So with the wrong bank routing number then, payments to service suppliers risk huge delays, rejections, and getting lost in the abyss.

Are these risks that your business can afford to take?

Checking that routing numbers for ACH payments are valid is simple, and there are two common ways to verify it:

  1. Look at your checkbook
  2. Go to your bank’s online website (or mobile app)

Look at your checkbook

In most cases, a bank’s ACH number is exactly the same as its ABA (American Bank Association) routing number. Both are routing numbers, although while ACH is used for electronic payments, ABA is used for paper checks.

If you have a checkbook physically available, you can find the routing number there and then. It is the nine-digit code to the far left bottom corner of the check. The magnetic ink helps Federal Reserve processing centers to read and direct the payment efficiently.

Beware that you can find two other numbers printed on each check – the account number and the check number. However, it’s easy to differentiate;

  • The account number has 8-12 digits and is printed in the center of the bottom of the check.
  • The check number has up to 4 digits and is usually printed at the top right of the check, it’s helpful for admin purposes but is typically not used by financial institutions.

Go to your bank’s website

Before you go ordering a book of paper checks just to verify your ACH number, or in case your bank chooses to change their ABA number, each bank publishes a list of their ACH routing numbers.

Theoretically, each bank should only have a maximum of five different ACH numbers. However, thanks to mergers and acquisitions, many have more (some in the hundreds). While some States just use a single routing number, some highly-populated areas are split into North and South.

Also, it’s important to remember that the purpose of an ACH routing number is to help the processing center know where to send the funds. Therefore, national banks with branches in multiple states are likely to use different routing numbers. Smaller or district banks might only have one.

Here are some helpful online services for some of the most common bank ACH routing number info:

What’s more, if you have access to a mobile app for your banking, it’s probable that the account information will display an ACH routing number upon login. This is useful for sending your own information to third parties. However, it doesn’t offer any insight into your merchants or vendors.

 

Why is controlling ACH routing numbers not enough?

Controlling ACH routing numbers is a good starting point for businesses to prevent both mistakes and fraud. This is especially true for instant ACH payments, which work on an expedited timeline to the standard 2-3 working days. But without verifying the rest of the banking information, it’s easy for ACH fraudsters to bypass your security checks and get away with your money.

For example, vendor fraudsters based in the same State as your real supplier could be attached to the same financial institution, meaning that the ACH routing number would be the same. If your checks only involved verifying the ACH code – this wouldn’t cause any suspicion or raise red flags (perhaps even at a Federal level).

Therefore, it’s only controlling and monitoring the entirety of the banking information that can ensure a strong level of protection against infiltrators. Plus, continuous monitoring is the best way to prevent human mistakes that could go unnoticed in a busy office environment.

Platforms like Trustpair provide automatic account validation to verify all banking information against external data sources, ensuring that your funds are paid directly to the right supplier. For example, this includes the company number, bank account number, bank branch address, and of course, the ACH routing number.

What’s more, by working in real-time, we can block automatic payments from leaving your account if this information doesn’t add up.

 

When do you need an ACH routing number?

For a quick recap, an ACH number is nine digits long. It’s used to ensure that electronic payments (such as direct deposits) are sent from and to the right banks. They’re typically used in conjunction with an account number, which then ensures that the payment settles not only in the right financial institution but the right account too.

The codes used in ACH transfers are typically the same as their ABA counterparts, which are found on checks. That’s because most financial institutions rely on the same code for both of these payment types. It can be easier to look at ACH routing numbers as if they are addresses, and payment processing centers can quickly scan them to know where to send the money.

Routing numbers can be used to set up direct debit, pay via check, or even wire transfers (although wire payments have their very own routing number). Learn the difference between ACH and wire transfer in this article.

To conclude

Valid ACH routing numbers are necessary for ensuring that payments are going to the right suppliers. However, only validating the ACH bank information isn’t enough – as fraudsters can bypass this security feature with ease. Instead, use Trustpair to validate all banking information against external databases and protect your company against the threat of fraud.

FAQ

Bank routing through ACH refers to the nine-digit code that labels a specific financial institution. Checks, wire transfers, and direct deposits all rely on a routing number so that processing centers know exactly where to send the payments.

ACH routing numbers are typically paired with an account number so that processors not only hold the financial institution information but also within which account to place the funds.

Before making a transfer, bank checks are vital for protecting against both mistakes and fraud.

Trustpair checks a range of banking information against external data sources to ensure that suppliers are being honest and that they’re real. For example, we check company information, ultimate beneficial owners, bank institution info, bank account number, and ACH routing number for electronic payments.

When it comes to payments, ACH routing numbers are used for domestic transfers and direct deposit, while IBAN numbers are for international wire transfer bank routing. Bank routing with an ACH is fairly simple because the format of each of them is the same (always nine digits). But ACH numbers are not necessary for credit card payments.

Instead, say if you have an international supplier, to send money to a foreign bank account you would need an IBAN. These vary in format based on the country you’re sending to.

Bank America = ACH, Bank International = IBAN.

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