Ensure that a bank account is valid, and safe to transact before using it for any debits or credits.

External account verification in PCE operates across three layers:

1. Account Validation: Validates whether the bank account exists and is operational.
2. Ownership Verification: Confirms that the account belongs to the intended customer.
3. Risk & Transaction Signals: Evaluates whether the account can safely support transactions (e.g., sufficient balance, return risks).

Each of these layers contributes to the final External Account Status.

This page explains:

• Verification methods and their flows
• Status journeys across different validation methods
• What each status means and when action is required

---

How Verification Works

• External account is created → INACTIVE
• Verification is initiated → PENDING_VERIFICATION
• One or more validation methods are executed:
  • Instant validation (EWS / internal match)
  • Prenote
  • Micro-deposit
• OFAC screening runs in parallel
• Based on outcomes:
  • Success → ACTIVE
  • Limited → ACTIVE (Credit Only)
  • Failure → BLOCKED

---

External Account Status (Primary Status)

This is the external account's status that determines whether the account can be used.

---

Verification Methods & Their Status Journeys

Each method has its own lifecycle and outcomes.

Always monitor External Account Status + Method Status together

1. Instant Validation (EWS / Internal Matching)

Best for: Real-time validation

Status Journey

PENDING → OPEN / VALIDATED
       → NOT_FOUND
       → INVALID_DEBIT_ACCOUNT
       → CLOSED / HIGH_RISK

Statuses Explained

2. Prenote Verification

Best for: Bank-level validation without moving funds

Status Journey

PENDING → PROCESSING → COMPLETED
                        ↓
                     FAILED

Statuses Explained

3. Micro-deposit Verification

Best for: Ownership confirmation

Status Journey

PENDING → PROCESSING → AWAITING_VERIFICATION → COMPLETED
                                      ↓
                                  RETURNED / VERIFICATION_FAILED

Statuses Explained

---

Instant Internal Validation (Passport Account Matching)

Status Journey

PENDING → OPEN
       → INVALID_DEBIT_ACCOUNT
       → VERIFICATION_FAILED
       → BLOCKED
       → NOT_FOUND

Statuses Explained

---

OFAC Verification Status

Compliance layer that runs parallel to account validation.

---

Linked Document Status

---

Failure Handling & Re-verification

Common Failure Scenarios

Insufficient Funds / Returns (e.g., R01)

• Account may be marked Credit Only
• Debits are restricted temporarily, Retry debit later

Account Closed / Invalid (e.g., R02)

• External account is moved to BLOCKED
• No further transactions allowed
• User must add a new account

Verification Failures

• Micro-deposit / Prenote failures → BLOCKED
• User may need to re-add or re-verify account

Automatic Re-verification

• If EWS = NOT_FOUND → fallback to Prenote or Micro-deposit
• If verification fails → account may require re-creation
• If manually unblocked → returns to PENDING_VERIFICATION

---

Important Rules

• Only one validation method (Prenote or Micro-deposit) can be used
• External accounts are activated only after successful verification
• Duplicate accounts (same number + routing + type) are not allowed
• Verified documents cannot be deleted

---

Best Practices

• Prefer Instant Validation for faster onboarding
• Use Micro-deposit when ownership confirmation is critical
• Monitor status transitions via Retrieve API
• Handle BLOCKED accounts gracefully in your UI

---

Pending

• Instant Ownership Verification (GIACT)
• Concept of Vault?
• Concept of Instant Ownership Verification (EWS / Internal Matching) needs to be validated