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Felipe Fernandes

Felipe Fernandes

Paying With a Bank Account – Instant vs Manual Verification

Paying With a Bank Account

At PaidUp, we want to make it as easy as possible for parents to pay using any method they choose, whether that’s debit, credit or bank accounts. Today we roll out a new feature whereby parents can manually add any bank or credit union for making payments.

Debit/Credit card companies have a system of sophisticated fraud tools that thus help keep consumers safe when they use their cards. Debit/Credit cards can also give you an instant response as to whether funds are available on that card account. On the other hand, banks still operate on technology invented decades ago, and thus this slows down the processing time but also makes banking transactions much cheaper than debit/credit cards.

Before a parent can use a bank account for a payment, we must verify that they own that bank account. The process of verification is an industry best practice and implemented for security purposes. There are two ways for parents to verify their bank account: instant verification and manual verification.

Instant Verification

PaidUp utilizes a 3rd-party service called Plaid to help instantly verify a bank account. Plaid takes security very seriously since this is sensitive information. By logging into your online banking account, Plaid and PaidUp can instantly verify you are the owner of that bank account since only you should know the login info. Once verified, a parent can add their checking account and start making payments with that account immediately.

Manual Verification

Plaid supports over 1000 banks and credit unions with its instant verification process, but since there are over 6000 financial institutions in the US, it’s possible that some of the smaller banks and credit unions cannot be verified instantly. That’s where manual bank verification comes in.

If the parent cannot find their bank, they will now be prompted to manually add their bank account by entering in their routing number and account number for their bank.

Parents can add any bank account using this method, even if their bank is listed for instant verification. The caveat is that we must still verify that the parents are the owners of this bank account. To do so, PaidUp will make two small deposits into their bank account. Within 2-3 business days, the parent must look at their bank account statement to retrieve those two small deposit amounts. If the deposit amounts match, then we know that the parent is the owner of that account, again, because only they should have access to their statement.

Parents will not be allowed to pay with that bank account until the account is verified.


We are looking to make the parent journey easier by adding new features. We hope that this will allow parents to use whatever payment method works with their budget. Whether they choose to verify their account instantly or manually to instantly is their choice. If they run into any issues, PaidUp is always here to help.

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