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Fighting fraud before it happens with GoCardless’ new account verification tool

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Last editedJul 20213 min read

Three months after launching Instant Bank Pay in the UK, GoCardless has its sights set on the US for its next open-banking offering, Verified Mandates. The feature provides businesses using ACH with an advanced level of security when onboarding new customers by automatically confirming if bank details are valid. 

Seamlessly integrated into a businesses’ checkout flow, and NACHA ACH WEB debit rule compliant, Verified Mandates is the latest feature to enhance payments while also demonstrating GoCardless’s dedication to improving account-to-account payments at a global scale. 

US businesses have previously had to accept fraud risk or use high-friction payment solutions

35% of businesses across the US and Europe rank payment fraud among the top threats facing their business today, with nearly half of US recurring revenue businesses considering payment fraud the number one threat.*¹

Despite fraud being a high-level concern for businesses, currently:

  • Almost two out of every three US businesses take up to three business days to spot a fraudulent payment

  • A fifth of US businesses are willing to provide goods or services before authenticating a payer

The problem with cards

Up until now, businesses have had to choose from payment solutions that either come at a higher cost, offer a low ROI, or cause checkout friction. For example, card payments have an average failure rate of up to 15%, which can lead to higher churn rates and a loss of revenue. Card payments are also becoming increasingly unpopular. 43% of recent survey respondents told us that they either strongly or extremely agree that they are less likely to pay with credit cards now compared to before the COVID-19 pandemic. 

Previous drawbacks with ACH bank debit

So, what about bank debit? ACH bank debit payments have a lot of benefits for both businesses and consumers, from transaction speed, lower processing fees, and ease of setting up recurring payments. However, stolen bank details have historically been one of the most common types of fraud alongside stolen or fake card details, and previously there was no way to make these payments safer for businesses.

Making ACH debit more secure for businesses

Verified Mandates by GoCardless can be added to a merchant’s checkout flow to stop payment fraud before it even happens, giving businesses the confidence to leverage the benefits of ACH bank debit.

What are Verified Mandates and how can they reduce fraud?

Powered by Plaid, Verified Mandates by GoCardless is a fraud prevention tool that verifies your new customers’ bank details, giving you the peace of mind that they are who they say they are. Your customers simply enter a few details in the checkout process and we help them automatically log in to their online banking to verify their information. If everything checks out, your customers are verified and you both receive an instant confirmation. 

Smooth payer experience 

The best part? We are helping you reduce fraud, without adding unnecessary friction. Payers don’t need to memorise their account or routing numbers in order to confirm their details, we’ll be able to help them automatically log in to their online banking. 

The Verified Mandates process can be broken down into four key steps.

  1. Add Verified Mandates to your payment flow after activating them in your GoCardless setup

  2. Ask new customers to enter the payment flow and complete a standard ACH mandate form

  3. Powered by Plaid, your customers can then select and confirm their bank account details

  4. We’ll then verify their account details and send you both a confirmation instantly so you know that everything is completed and safe

What are the main benefits of Verified Mandates? 

Catch fraud instantly

Verifying your payer’s bank details at checkout will save you time, money, and worry - even if you’re onboarding hundreds, or even thousands, of new customers every day. 

Uninterrupted customer experience

According to research from GoCardless, 85%*² of online shoppers say they would abandon a purchase if the checkout process was too long and a further 25% say they would abandon the checkout if they had to manually enter their bank details. This demonstrates how important it is to offer a quick and safe way to checkout. Verified Mandates are seamlessly integrated into the existing payment flow and allow payers to instantly confirm their details without needing to memorize their Account or Routing numbers. 

Future proof

By using Verified Mandates and automatically verifying the first transaction you’ll be ensuring that you’re compliant with the NACHA ACH Web debits rule, allowing you to future proof your payments strategy.

Helping your business to use ACH bank debit with confidence

At GoCardless, we’ve specialized in account-to-account payments for over 10 years. Whether your business is concerned about identity fraud, customers who have no intention of providing valid payments for goods and services, or just protecting your revenue, we believe that Verified Mandates is the solution. 

Find out more about Verified Mandates by GoCardless and they can help to protect your business against fraud.

*¹The research cited was conducted online by GoCardless between Feb/Mar 2021 and covers over 250 commercial US businesses.

*²The research cited was conducted online by GoCardless Jun 2021 and covers over 1009 US respondents.

Interested in automating the way you get paid? GoCardless can help
Interested in automating the way you get paid? GoCardless can help

Interested in automating the way you get paid? GoCardless can help

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