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4 types of bank account data errors that may be causing payments failure

Any successful bid to resolve payment failures caused by invalid bank account data hinges on the ability to accurately understand the causes: error types, their frequency and specific category.Without this understanding the error will never be fixed and simply continue. 

There are four types of bank account data errors that may be causing payment failure and all demand different strategies to prevent them affecting your cash flow.

1.     Error in reference number

When an account number is almost correct, but related reference information, such as the invoice or account number are wrong and cannot be reconciled with a supplier or customer account. Payments may be suspended while they get investigated – often with the payer believing they have met their obligations, while the recipient is unable to reconcile the outstanding transaction.

2.     Account number error

Occurs when the payment instruction reaches a bank but the account does not exist. But crucially how this type of error is dealt with varies from country to country. In the US, it is normal practice to immediately reject the transaction. In Europe, banks will attempt to resolve the transaction, generally without informing the payment originator – a helpful short-term fix, but often creates a larger long-term issue with more serious consequences as long-standing legacy errors get exposed.

3.     Invalid or missing bank codes

Generally as a result of the incorrect account details or changes made following bank mergers, acquisitions or restructuring. This occurred recently when a bank merger in the Netherlands, resulting in a change of all IBANs, prompted the need for mass updates of payments data in business systems.

4.     Badly-formatted data

This is most likely to occur when data gets mis-heard and mis-keyed. If measures are not taken to validate or verify bank account data at this point, then a proportion is likely to be rendered completely invalid.

Find out more about the types of bank account data error, the impact it has and what you can do to solve the problems by clicking here and downloading your free copy of Does Valid Bank Account Data Matter?




This article is about: Account number error, bank account data validation, bank account number errors, bank account reference number, bank account validation, IBAN, IBAN + BIC, IBAN data, Payment Errors, payments, reference number error, validate bank details, verify bank details