How ACH works: A developer perspective – Part 2
engineering.zenpayroll.com
How ACH works: A developer perspective – Part 2
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Re: How ACH works: A developer perspective – Part 2
#2If you find this interesting you may find the work Knox is doing pretty cool - we're able to verify funds before we make payments (so there no NSFs), get and verify account numbers without asking for the user to tell us them, and verify the identity of the payor all in one step - we just have them log into their online banking (like you do with Mint or Yodlee except faster). We've never had an ACH file returned ever, and all our payments are 100% guaranteed against everything but chargebacks as soon as they're made.
It takes away just about all these problems. We don't store usernames or passwords so there's no fraud risk there, but it does require some trust from the user to do something they're not used to, but it's super fast and easy for the user. I hope we can help solve some of these problems for developers! (Plus it's only $0.18 a payment).
If you want to try it you can donate to some cool non-profits using Knox on thesimpledifference.com - all three are worthy causes, but I think y'all will find HackCville particularly interesting. A note: the payment happens in an iFrame that is SSL secured, but thesimpledifference.com does not have SSL (currently pending). It doesn't matter really, but I know that can feel odd and 100% understand if that's offputting. Let me know if anyone has any questions!
Re: How ACH works: A developer perspective – Part 2
#3If you find this interesting you may find the work Knox is doing pretty cool - we're able to verify funds before we make payments (so there no NSFs), get and verify account numbers without asking for the user to tell us them, and verify the identity of the payor all in one step - we just have them log into their online banking (like you do with Mint or Yodlee except faster). We've never had an ACH file returned ever,…
You should fix the lack of SSL security on thesimpledifference.com
Why? iFrame SSL certificates aren't visible, and no, your VeriSign trusted doesn't count. This means users will find it offputting as you note.
Why else? Someone could hijack the HTTP page and point the iframe location somewhere else where they then intercept bank details.
Next knox only seems to support a limited number of banks, unlike ACH which I'm assuming supports alll banks.
Finally 'log into their online banking' worries me. I'd never hand over my online banking details to a third party (I suspect doing so would violate the T&Cs on my account!).
Re: How ACH works: A developer perspective – Part 2
#4If you find this interesting you may find the work Knox is doing pretty cool - we're able to verify funds before we make payments (so there no NSFs), get and verify account numbers without asking for the user to tell us them, and verify the identity of the payor all in one step - we just have them log into their online banking (like you do with Mint or Yodlee except faster). We've never had an ACH file returned ever,…
You should fix the lack of SSL security on thesimpledifference.com Why? iFrame SSL certificates aren't visible, and no, your VeriSign trusted doesn't count. This means users will find it offputting as you note. Why else? Someone could hijack the HTTP page and point the iframe location somewhere else where they then intercept bank details. Next knox only seems to support a limited number of banks, unlike ACH which I'm…
Agreed on the SSL bit - we ask all our businesses to use it but we didn't put it on our test site. That's embarrassing I'm putting it up now.
And yes, we serve the 30 banks that constitute 60% of banking volume in the US, and at least 60% of banking customers (although we suspect more, since many people who have a smaller account have a top 30 account too). We're increasing that number, but you can turn our system on so that when we don't integrate, you can still send account number and we do ACH the traditional way.
As for you not wanting to login to your online banking - you may be right! You may never do it. However, I've heard that before from a lot of people who turn right around and use Knox 30 seconds later and then become customers - so I hope you're in that group! There are some people who will be cautious, but it's actually smaller % of people than I initially thought it would be.
Re: How ACH works: A developer perspective – Part 2
#5If you find this interesting you may find the work Knox is doing pretty cool - we're able to verify funds before we make payments (so there no NSFs), get and verify account numbers without asking for the user to tell us them, and verify the identity of the payor all in one step - we just have them log into their online banking (like you do with Mint or Yodlee except faster). We've never had an ACH file returned ever,…
I'm curious, if you don't store usernames and passwords for banking credentials, how do know if the ACH transfer will NSF? Do you ask the account holder for their bank credentials each time you want to pull money from their account?
Re: How ACH works: A developer perspective – Part 2
#6If you find this interesting you may find the work Knox is doing pretty cool - we're able to verify funds before we make payments (so there no NSFs), get and verify account numbers without asking for the user to tell us them, and verify the identity of the payor all in one step - we just have them log into their online banking (like you do with Mint or Yodlee except faster). We've never had an ACH file returned ever,…
I'm curious, if you don't store usernames and passwords for banking credentials, how do know if the ACH transfer will NSF? Do you ask the account holder for their bank credentials each time you want to pull money from their account?
No - so we risk rate for recurring payments and get a bunch of info from online banking that helps us determine how large of a recurring payment and at what interval we can allow. We've never been wrong, but we will be someday I'm sure. Recurring payments right now are not fully guaranteed against NSF risk only the first one and all one time payments. So for ZenPayroll I suppose that's particularly relevant.
Someday we hope to offer stored usernames and passwords as a service (making it super clear to the user that it's being authorized) but for now we only have really good security people - not "best in the world" people who would make me comfortable doing that.
Re: How ACH works: A developer perspective – Part 2
#7Planet money also did a podcast on this and went into a bit of how the ACH system works (not from a development point of view). It's a very strange system and honestly the episode raised more questions than it answered but it seems there is a lot of secrecy behind how it all works. Also why it all works... The fact that it can take 3-5 business days to transfer money electronically between different banks in the same country is difficult to grasp, but they make an effort to explain why...
http://www.npr.org/blogs/money/2013/10/04/229224964/episode-...
Re: How ACH works: A developer perspective – Part 2
#8Please write part 3. That will be very helpful.
Re: How ACH works: A developer perspective – Part 2
#9If you find this interesting you may find the work Knox is doing pretty cool - we're able to verify funds before we make payments (so there no NSFs), get and verify account numbers without asking for the user to tell us them, and verify the identity of the payor all in one step - we just have them log into their online banking (like you do with Mint or Yodlee except faster). We've never had an ACH file returned ever,…
I'm curious, if you don't store usernames and passwords for banking credentials, how do know if the ACH transfer will NSF? Do you ask the account holder for their bank credentials each time you want to pull money from their account?
Basically scrape the account.
Avg daily balance is probably the primary number. Low balance, high balance, NSFs, etc.
Re: How ACH works: A developer perspective – Part 2
#10Please write part 3. That will be very helpful.
Seconded, this has been a great series so far.