Announcing Instant Microdeposits with RTP and FedNow

Today, we’re announcing the launch of instant microdeposits using FedNow and RTP to let customers verify bank accounts instantly and 24x7.

Instant Account Verification with FedNow and RTP

The traditional method of account verification using ACH microdeposits often involves waiting days for small deposits to appear in a customer's bank account, leading to delays in accessing funds or services. It doesn’t work on weekends and has to adhere to the bank’s ACH processing windows.

It also leads to poor user experience as customers need to check their bank account days later to complete verification. This is more acutely felt in cases where account verification services are not available or when customers choose not to use them.

With FedNow and RTP, this once time-consuming process becomes real-time—instantly verifying bank account information. It works 24x7—even on weekends.

Benefits of Using Instant Microdeposits

Instant microdeposits works for both B2C and B2B account verifications, and provides benefits for your company and customers alike, including:

• Enhanced Customer Experience: Onboard your customers faster—they won’t need to wait several days to access your product, or remember to check their account when the microdeposits arrive.
• Reduced Abandonment Rates: Enable customers to complete the sign-up or checkout process quickly, while there is high intent, thereby lowering drop off rates.
• Improved Cash Flow: Ensure your accounts payable and receivable processes run smoothly with rapid verification, reducing delays and optimizing cash flow.

How it works

Instant microdeposits use a combination of FedNow, RTP, and ACH. The payments are sent via FedNow or RTP, and are recovered automatically via ACH debit. Payments are automatically routed between FedNow and RTP, depending on what rail is supported at the counterparty’s bank.

Modern Treasury then automatically reconciles the transactions when completed.

Next Steps

For more information on how to initiate instant microdeposits, refer to this guide. And if you have any questions or want to talk to a payments advisor, reach out to us.