Most third party entities that offer a Checking Account Verification Service utilize routing account number validation and negative databases. The bank routing number identifies the bank the check is drawn against.
The databases holding this information can be checked in real time. Negative databases are basically a history of checking account info, with retailers contributing data to the network. Recency becomes an issue because the customer’s last written check at a participating retailer is the last data point, meaning that data can be out of date.
An ATM network is the next level of the ACH Verification Process. The network is created by data contributed by banks and Credit Unions. Daily uploads on account status are made to the network, and queries to the network can provide account insight. Check verification inquiries come with an almost immediate response. These responses can tell you that the account # is invalid, the account is closed, the account is in an NSF status: For some businesses this is important as they do they know they have a good account, and that the account is non DDA eg Home Equity checks.
Understanding How to Verify Bank Account Numbers Online and Implementing a Checking Account Verification Service can dramatically reduce bad check acceptance and the workflow problems they create.