Presented by Envestnet | Yodlee

Nacha’s launch of new account validation requirements is a big event, with new opportunities for financial services companies. Learn what’s changed, how to turn fraud safety into consumer satisfaction, an overview of the online payment landscape, and more in this VB Live event.

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ACH has gained great value for companies in the fintech space as consumers flock more to digital payment accounts like Paypal and Venmo where their purchases are funded through a bank account rather than through a credit card, says Eric Jamison, VP, Product Management, Envestnet | Yodlee.

“What people in the fintech space have realized, especially those in the startup space, is that there’s value in allowing their customers to use ACH, because every dollar counts,” Jamison says. “It’s helped to raise awareness of the use of the ACH network to allow these types of transactions and, with all the different advancements, to do them with speed.”

That speed — the ability to facilitate a transaction in real time through the ACH network, as quickly as a credit card would — has also helped advance the use and the ubiquity of that service in the fintech space, to the point where it’s become one of the primary methods that fintechs are looking at for consumers to transact.

The rising fraud problem — and Nacha’s response

But no good deed goes unpunished.

“As growth has happened in the space, it just becomes a target,” Jamison says. “Fraudsters are like water — they’re going to go through the path of least resistance. If they perceive ACH as one of those paths, they’re going to target it.”

Now the industry has done a good job helping mitigate and fight fraud, but it’s always evolving. That’s one of the key issues behind the recent NACHA initiative. It’s reacting to the market and helping raise awareness of the need to continue to evolve your tactics to mitigate fraud.

Nacha recognized the problem, and its growing impact, as early as 2018. Originally the rule was set to come into effect in early 2020, but it had to be pushed out to March 2021 in order to allow companies the time to develop ways to meet the requirements.

Behind the new Nacha rule

Companies using or initiating ACH web debits have always had the requirement to use a commercially reasonable fraud detection system. The rule change is that one of those commercially reasonable solutions could be account validation.

In essence, what that means is, before a transaction is initiated off an ACH account or demand deposit account (DDA), the institution has to validate that account.

There are a variety of ways that they can do that. There’s pre-note, to make sure that account exists. There are services that can provide information about whether an account exists and the standing it’s in, in conjunction with providing some measure of ownership. Or there are services that, like Yodlee’s account verification that can do an account ownership balance inquiry in real time, while also obtaining the account and routing number information for the account.

Nacha is open to the different types of services one can use to perform that validation, as long as the provider meets their requirements.

Benefits and opportunities to fintechs in new validation rule

One of the biggest advantages this new rule offers is speed, Jamison says. For a consumer looking to perform a transaction, whether it’s a transfer, or setting up their direct deposit with their employer, or making a purchase or payment, instant account verification is a huge bonus.

With new account verification systems, consumers have the ability to validate that information in-stream — no need to ask them to go off and find their checkbook, which increasingly people don’t have handy, and use the credentials they have at hand, like a valid login for a site, or their face ID or thumbprint on their mobile device.

Account verification should be as easy as taking out your credit card and swiping it, or easier, because people don’t want to futz around, looking for that information. They just want to transact, Jamison explains.

“It just allows that consumer to feel confident that, hey, this provider and the service that I’m looking to use is looking out for my best interests,” he says. “You’re making it easy to verify their information and get them through the transaction and on with their day.”

The speed fintechs can offer to their customers, coupled with the fraud mitigation ability that comes from being able to analyze the type of activity you’re running, are major advantages to fintech companies — so now is the time to get ready for the coming validation.

To learn more about the Nacha rule and the account verification systems that preferred partners offer, plus a deeper look at the payments landscape and more, don’t miss this VB Live event.

Don’t miss out!

Register here for free.

Attendees will take away:

  • An in-depth look at the Nacha WEB Debit Account Validation Rule
  • Broad overview of the current and future online payment landscape
  • Lessons from the financial services companies in the fray
  • And more


  • Jason Carone, Director of Product Management, Silicon Valley Bank
  • Eric Jamison, VP, Product Management, Envestnet | Yodlee
  • Evan Schuman, Moderator, VentureBeat