Account Verification Fees for ACH Payments
When a resident sets up ACH payments, they enter their ABA bank routing number and account number to provide information about their bank and their account.
Stripe needs to verify that the account is valid and viable before it can use it to process payments. Stripe can perform that verification in either of two ways.
The “old-fashioned way” with microdeposits
Following this procedure, Stripe would deposit several small amounts of a few cents apiece into the resident’s bank account and then have the resident verify the date and amounts of these microdeposits. This is what PayPal used to do.
The problems with this method are obvious. First, several days can elapse between the time the resident submits the bank account information and the date on which the micropayments actually appear on their account. This prevents the resident from making their payment while they’re actually thinking about doing so.
This also forces the resident to remember to log in to their bank account, obtain information about these microdeposits, and then provide that information to Stripe. The opportunities for inconvenience and failure are all too obvious. What if the resident forgets to check for the deposits? What if they check for them before the deposits actually are present, and then don’t check again later? What if they forget to report the amounts to Stripe? The process relies on memory and follow-through.
Because this doesn’t work well for the ways your residents want to pay—and to make it easy for them to make timely remittance of their required assessments—this isn’t the way we’ve implemented online ACH payment-account setup.
The “instant verification” procedure
This process enables the resident to submit their bank account information and begin using the account for ACH payments virtually immediately—if the financial institution is one that Stripe supports. This way, the payment process proceeds seamlessly from account selection to payment readiness.
Unfortunately, however, this convenience comes at a price. Stripe charges a $1.50 account verification fee each time a resident adds a bank account for use in making ACH payments. This is a one-time fee that does not coincide with any specific payment or bank deposit you receive. (Note that if someone removes and then reconnects a bank account for ACH payments, the account is treated as new and must be verified again.)
Because this fee does not occur at the same time as the procedure that prompts it, the reason for it may not be obvious at first. But if you notice a $1.50 difference—or some multiple of $1.50—between the amount deposited to your community’s bank account and the sum of the payments in that deposit, ACH verification fees represent the difference between those amounts.