Teams undergo various verifications in payment processing, such as verifying the account holder and matching the invoice number. Some of them also validate the routing number of their checks and electronic payments, but what is it all for? The wrong routing number could result in lengthy delays, transfer rejections, and even financial losses if the money goes unrecovered. And if businesses fall victim to fraud schemes, they could stand to lose a whole lot more. More details in this article.
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Why and how should you validate a routing number?
Validating a routing number is important in order to ensure there are no mistakes when transferring funds or paying someone.
This stands for ACH routing numbers, which handle electronic transfers, and ABA routing numbers, for paper checks. With almost 27,000 active routing numbers being used in the US today, it’s important to verify and ensure that the right number is listed for payments.
However, validating a routing number is also important to detect and prevent attempts of fraud. Although electronic (and even mobile) transactions are becoming more common, checks are still prevalent in the US, and they’re the easiest money transfer method to rip off. In 2022, there were still 680,000 possible cases of check fraud, an amount which was almost doubled from 2021.
Ensure that your business validates the routing number on any electronic transactions or checks to make a start on protecting your finances.
Check a routing number in four ways:
- Bank lists
- Online tools
- On the check
- Account number (electronic)
Bank lists
Most banks use the same routing number for ABA and ACH. Here is a list of routing numbers for banks in each location:
- Arizona: 122105155
- Arkansas: 082000549
- California (North): 121122676
- California (South): 122235821
- Colorado (Aspen): 102101645
- Colorado (Other): 102000021
- Idaho: 123103729
- Illinois (North): 123103729
- Illinois (South): 081202759
- Indiana: 074900783
- Iowa (Council Bluffs): 104000029
- Kansas: 101000187
- Kentucky (North): 042100175
- Kentucky (West): 083900363
- Minnesota (East Grand Forks): 091215927
- Minnesota (Moorhead): 091300023
- Minnesota (Other): 091000022
- Missouri (West): 101200453
- Missouri (Other): 081000210
- Montana: 092900383
- Nebraska: 104000029
- Nevada: 121201694
- New Mexico: 107002312
- North Carolina: 064103707
- North Dakota: 091300023
- Ohio (Cleveland): 041202582
- Ohio (Other): 042000013
- Oregon: 123000220
- South Dakota: 091408501
- Tennessee: 064000059
- Utah: 124302150
- Washington: 125000105
- Wisconsin: 075000022
- Wyoming: 307070115
Note that for most other states, the valid routing number is 091000022.
Online tools
Alternatively, individuals can effectively reverse search the list above if they have the routing number, but not the bank. For example, the American Bankers Association holds a search page for individuals to input either the routing number or the financial organization and its location. You can find the same info on the ACH site.
There are some other tools out there to help check and validate routing numbers. However, these may not be as credible as the official website or app, and therefore users should go ahead with caution. The websites might publish the wrong information, playing a part in a larger phishing scheme, for example.
Fortunately, third-party platforms like Trustpair also work to validate account details when they are linked to electronic transfers.
Trustpair automatically validates supplier information against robust external databases, such as bank addresses, ultimate beneficial owners, and routing numbers. By continuously monitoring this set of data, transactions are blocked when it doesn’t match up, protecting your savings against fraud schemes.
It ensures that companies are confident in their payments and fraud prevention solutions. And because this all happens in real time, businesses are protected against even last-minute ‘change of pay’ requests.
On the check
Checks themselves actually list the routing number for users to validate.
Now, there are a few different figures on paper checks, including the routing number, account number, and check number. In order to validate the routing number, search the bottom left corner. The nine-digit code is your routing number.
Account number check
For electronic payments like ACH or wire, routing numbers can also be checked.
Platforms like Trustpair do this by validating the whole account number. Since the account number can only be found at one bank branch, it should match up with the location, and therefore the routing number of the payment.
Why is validating a routing number not enough?
While a valid routing number is a good sign, it doesn’t mean that the rest of the banking information is valid, or that the money is in safe hands.
Remember that 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.
To validate the rest of the banking information, checking the following “know your supplier” information is helpful:
- Bank address
- Bank account number
- The bank account holder’s name
- Company address
- Company owners and more
Of course, trying to complete this manually is virtually impossible – especially for those with tens or hundreds of suppliers. Fortunately, Trustpair validates all this banking information and more thanks to external data sources and third-party monitoring, making sure that you’re paying the right supplier and not a fraudster.
Third-party fraud can have disastrous consequences on companies and individuals alike. Lee-Ann Perkins, a treasurer with decades of experience, shares her story in our latest video series.
When do you need a routing number?
Routing numbers are necessary for a few scenarios, but businesses will most likely value them for establishing a direct deposit, automating transfers, and for tax purposes.
They’re only necessary for the direct transfer of funds to or from your account, but not for debit or credit card.
The Federal Reserve needs to identify and read routing numbers in order to send money to the correct financial institution. Then, the bank uses the account number to place the money in the right bank account.
Where can you find a routing number?
When a checkbook is physically available, find routing numbers instantly. They’re the nine-digit codes found at the bottom left of the check.
Be aware that the account number (corresponding to the holder’s bank account) might be located right next to the bank routing number, in the center-left of the check. So it’s important not to get confused!
What makes a routing number valid?
There are some tell-tale signs that routing numbers might not be valid.
Firstly, how many digits? For a valid number, routing codes should and can only have nine numbers, no matter if they are ACH or ABA.
Moreover, ensure that checks are valid by confirming that the routing number is to the bottom left. Routing numbers on checks are also made from a special magnetic ink, allowing them to be read correctly by the Fed Reserve processing centers.
No matter whether the routing number is ACH or ABA, it must be used in conjunction with account information to ensure that transactions are made successfully.
In Summary
Routing numbers are typically the same for ACH and ABA, online payments (learn more about preventing fraud with online payments here), and checks. Validate routing numbers to avoid mistakes and fraud, but remember that other banking information also needs verification. Use Trustpair to verify data against external databases in real-time, monitor supplier information, and prevent fraud.
