Orum’s new product built on FedNow will allow instant verification of bank accounts

Payments API provider Orum recently announced the creation of a brand-new product, and the first one to launch on the new FedNow rail.

The product, known as Verify, is a new technology that will allow for instant verification of bank accounts. According to the company, Verify only needs 15 seconds to determine with utmost certainty whether any business or consumer bank account is open and valid, before initiating payments.

Why is verification a problem?

The product seemingly only covers the US at this time, although this technology could eventually spread worldwide. According to Orum, businesses were forced to use a number of extremely outdated solutions to make such checks until now, such as relying on slow microdeposits that each user had to input prior to having their payment processed and transaction completed.

In addition to that, businesses also had to use batched historical data that would often fail to reflect intra-day changes. Then, there was also the need to manually enter end-user login credentials. All of these methods of verifying accounts’ legitimacy are old and flawed, especially in modern times, when both businesses and customers not only appreciate but also expect speed from payments technologies.

Granted, credential-based verification did become a popular alternative among consumers, but the approach is considered insufficient in many cases, especially when it comes to B2B payments, according to Orum.

The company’s new product is a game-changer, and Orum launched it on FedNow, which allowed it to build this new tech that will tap the new payment rail and provide real-time account information to businesses.

Once the process is started, the rich data goes back to the business automatically, using a webhook. The business then receives real-time results, which eliminates the need for the customer to be involved in the verification process entirely, allowing them to simply make the payment, get their product, and go about their business.

Speeding up verification could lead to growth in revenue

Orum’s CEO, Stephany Kirkpatrick, stated that failed payments cost the global economy over $100 billion every year. On top of that, a massive amount of time is lost on verifying accounts, which also equals lost revenue, and also lost customers.

In truth, many customers would not bother with it and would rather give up on the purchase. At the same time, the amount of time they spend on verification could be used for reviewing other products that they might buy, which is something that they won’t do if they have to deal with verifying their own accounts.

Kirkpatrick noted that this is especially the case when it comes to business bank accounts, which are even more difficult to verify than consumer accounts.

“Businesses need confidence they are debiting or crediting a real account to ensure the payment lands safely in the bank account, but most solutions today are slow or don’t include coverage for all B2B use cases. Verify – built on top of FedNow – has changed this equation, making it now possible to verify any type of bank account instantly,” she said.