Deposit checks authenticate account ownership by depositing a small amount — anywhere from $0.01 to $5.00 — into a consumer's account and asking them to report the exact amount back.
How it works
- Setup: collect card or bank account details, address, and phone from the new consumer, and let them know a small deposit or charge is coming
- Deposit made: the merchant sends the small transaction and emails the consumer to watch for it
- Validation: the consumer checks their online banking, phone banking, or statement, reports the amount back, and the merchant confirms it matches before approving the account
What it's good for, and what it isn't
It genuinely confirms account ownership and, with good record-keeping, helps pre-screen future transactions from the same account. It won't catch true identity theft, though — the account itself can still belong to someone else entirely. It's also expensive to set up, can take up to a month to complete, and adds real friction for the consumer.
Making it work
Pair it with velocity checks, maintain positive and negative lists, watch for one account tied to multiple identities, and re-verify any time a new payment method is added.
Cost level: high. Sample vendors: Giact, Microbilt, Plaid.