Bank Account Verification

January 24, 2024
minute read

To ensure the highest possible payment success rates, FRIDAY will perform a correctness check, also known as 'validation.' This applies to Company bank accounts as well as Employee and Contractor bank accounts.

How validations work:

There are two ways a Company, Employee, or Contractor can connect their bank accounts to FRIDAY:

  1. Plaid Bank Accounts: Using Plaid, referred to as a Plaid bank account, allows for automatic validation by Plaid. This is the most seamless way to connect a bank account.
  2. Raw Bank Accounts: FRIDAY automatically validates all bank accounts as soon as they are created. This is done by initiating a $0 ACH payment to the bank account. These $0 ACH payments are not visible to the account holder. If the payment fails (typically within 2 banking days), the validation check fails, and that bank account is disabled. FRIDAY assumes that the account is valid unless this $0 transaction fails.

Recovering from Failed Validations:

Bank account validation failures occur when incorrect bank account information is provided. When bank account validation fails, the bank account is moved to a disabled irrecoverable state, and any attempt to move money in or out of the account will result in the payment being rejected by the bank.

To recover from this, the account must be replaced with a new bank account. This new bank account will be validated as soon as it is created in our systems.