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Microdeposits

Overview​

When users set up USD ACH virtual accounts for bank withdrawals, as described in the Bank Onramp via USD Virtual Account Recipe, they may need to complete a microdeposit verification process to confirm account ownership. This standard banking procedure involves sending one or more small deposits (under $1) to the user's bank account, which the user must verify to activate their virtual account.

Microdeposits (or Micro-Entries) are one or more small ACH credits, and optionally offsetting debits, sent by a financial institution or originator to verify a customer’s account and access during ACH account setup. Key characteristics:

  • Purpose: Identity verification when linking ACH accounts
  • Appearance: Show as regular deposits in the user's transaction history
  • Requirement: Mandated by banks for secure ACH account registration
  • Compliance: Standard requirement for ACH transfer authorization

Note the following:

  • Only marked ACH micro-entries are treated as verification. A deposit counts as verification only if all of these are true:

    • The deposit uses the ACH rail.
    • The deposit reference has the NACHA ACCTVERIFY marker.
    • The deposit amount is less than $1.00.

    Noah shows a verification deposit as an informational transaction only. Noah does not onramp it or add it to the account balance.

    Noah onramps all other deposits as normal deposits, including:

    • ACH deposits under $1.00 that do not have the ACCTVERIFY marker.
    • Deposits that use SEPA, SWIFT, or wire, at any amount.

  • Only Virtual Accounts support verification. Static memo-based deposit flows are not compatible with microdeposit verification. Each customer must have an individual Virtual Account.

  • Microdeposit Event. The microdeposit event includes the amount, source bank details, and timestamp. You can display these to customers for verification, if needed.

Verification Process​

  • Customer initiates linking their bank account to the provided VA
  • Some banks require microdeposit verification
  • One or more microdeposits are sent to customer's bank account
  • Customer receives email with amounts for verification
  • Customer enters amounts in verification UI
  • Bank account successfully linked upon verification

Webhook Events​

Each microdeposit generates 4 webhook events:

Event TypeStatusPurpose
FiatDepositPendingNotifies that the microdeposit has been received and is under review
FiatDepositSettledConfirms the microdeposit has cleared
TransactionPendingShows the microdeposit in the customer's transaction history
TransactionSettledConfirms the transaction is finalised in the customer's transaction history
tip
  • Not all banks require microdeposit verification
  • A verification microdeposit Transaction event does not cause an on-chain withdrawal.
  • Microdeposit amounts can be displayed in your UI as deposits for transparency

Conclusion​

The microdeposit verification process is a secure, industry-standard method for confirming ACH account ownership. Once users complete the verification by entering one or more small deposit amounts, their USD ACH virtual account is fully activated and ready for transactions.

Further Reading​