Microdeposits

Overview

When a user sets up a USD ACH Virtual Account for bank withdrawals, they may be required to complete a microdeposit verification process to confirm ownership of the linked bank account.

Microdeposits, also known as micro-entries, are one or more small ACH credit transactions — and in some cases offsetting debits — sent by a financial institution or payment originator to verify that the customer owns and can access the target bank account. This is a standard banking and compliance procedure used during ACH account setup.

Key Characteristics

• Purpose: Verify ownership of a bank account during ACH account linking

• Appearance: Microdeposits appear as small deposits in the user’s bank transaction history

• Requirement: Some banks require this step before ACH registration can be completed

• Compliance: This is a standard requirement for ACH transfer authorization and account validation

Not all banks require microdeposit verification.

• # Important Notes

Microdeposits are never onramped. Any deposit under $1.00 is treated as a verification attempt only and will not trigger a payment, transfer, or settlement.

Unlike standard deposits, Lotus does not accumulate the balance of microdeposits. Once verification is complete, these amounts remain unprocessed.

• Additional notes:

• In most cases, microdeposit amounts fall below Lotus's fee threshold, so no output withdrawal is generated.

• Only Virtual Accounts support microdeposit verification.

• Static memo-based deposit flows are not compatible with this verification method.

• Each customer must have their own individual Virtual Account to complete the process.

• A microdeposit event may include the amount, source bank details, and timestamp. These details can be shown to customers for verification and transparency.

Verification Process

1. The customer initiates linking their bank account to the assigned Virtual Account.

2. If required by the bank, one or more microdeposits are sent to the customer’s bank account.

3. The customer checks their bank transaction history to identify the deposit amount(s).

4. The customer enters the amount(s) into the verification interface.

5. Once the submitted values are confirmed successfully, the bank account is verified and linked.

   After successful verification, the user’s USD ACH Virtual Account is fully activated and ready for use.

Conclusion

Microdeposit verification is a secure, industry-standard method for confirming ACH account ownership. Once the user successfully verifies the deposited amount(s), their USD ACH Virtual Account becomes fully verified and ready for transactions.