Withdrawing money from bank

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o hai guyz

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Jan 15, 2010
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I recently started testing Stripe (credit card processor). The money goes to their account, similar to PayPal, and then every 2 days is sent to the bank account number that you enter into your settings. All you do is enter the account and routing numbers and they can send you your funds as needed (unlike PayPal's "link" method of doing the 2 small deposits). However I also noticed they can withdraw money from your bank account as well, which I was a little confused about because I didn't know it was possible to withdraw money from someone else's bank just by knowing their account number. I assumed that the typical 2-small-deposits method was to verify with the bank that this company actually has permission to access your account.

I asked the bank about it and they said it isn't technically a withdrawal, they're initiating an ACH transfer. So if I know my neighbor's account number, can I just initiate an ACH transfer for $100k from his account to mine? That doesn't seem right. The bank didn't really do a great job of explaining why/how this is possible. Can anyone shed some light on this?
 


o hai guyz said:
So if I know my neighbor's account number, can I just initiate an ACH transfer for $100k from his account to mine?
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If you have the correct banking relationship, yes. Back in the day, for one project we were starting (which utterly failed) I was setup with Royal Bank for PDS, PAD, PAP, and one other -- can't remember the abbreviation.

Anyway, I was able to deposit and withdraw to / from any Canadian or US bank account. No authorization or anything needed. Just the account#, etc., and you can whip funds around the continent as desired. :)

Was cheap too. Like $0.15/transaction or something, regardless of amount. Software was really outdated though (sent me a USB card scanner, and everything), and the file formats for batch processing were a pain, but I'm assuming it's probably better nowadays. This was quite a while ago.
 
When you are in a position of trust you can abuse it quite a bit. However once you lose it you pretty much never get it back.

You can run a scam with the courts where you sue people for made up BS, claim to the court you served them when you never did and get a default judgement that can be used to garnish wages and go after bank accounts. All you have to do is lie to the court!

If you are willing to lie or commit fraud there are plenty of ways to steal money while never leaving your house or resulting to violence. They all leave a pretty definitive paper trail though.

In your example if you started a ACH transfer for $100k it wouldn't just clear and go through. Stripe would put a hold on it to protect themselves. The person you take the money from would have X days to report it as fraud to get there money back 100%. In this case Stripe would take the hit if they cannot get the money back from you. So essentially Stripe is just extending you credit here because they trust you to some degree. It's the same with any MID.
 
Every credit card processor I've worked with can both deposit and withdraw based on your transactions. Sales/Refunds/Chargebacks. I would bet its in the fine print. It's for their protection vs fraud.
 
miketpowell said:
In your example if you started a ACH transfer for $100k it wouldn't just clear and go through. Stripe would put a hold on it to protect themselves. The person you take the money from would have X days to report it as fraud to get there money back 100%. In this case Stripe would take the hit if they cannot get the money back from you. So essentially Stripe is just extending you credit here because they trust you to some degree. It's the same with any MID.
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That's true, but I'm actually more concerned about this system itself in general. Say miketpowell gave me his account number so I could wire him 200 bucks for a logo design or something. Now I have his account number, I'll just initiate a transfer from his account to mine, for the full balance of his account. Of course this is fraud and completely illegal, but just the fact that it's so incredibly simple is troubling.

I'm sure if you tried to pull 50 million dollars from PayPal's account, they would put a stop transfer on it and block it. But what if you tried to pull 50 thousand from an average person who only checks their statement once a month? The ACH would have already cleared, and the thief would have sent it to an overseas bank where he could withdraw the money and disappear.

This seems like a really outrageous system and I can't believe it's so simple to withdraw money from other peoples' bank accounts. Wtf?
 
o hai guyz said:
That's true, but I'm actually more concerned about this system itself in general. Say miketpowell gave me his account number so I could wire him 200 bucks for a logo design or something. Now I have his account number, I'll just initiate a transfer from his account to mine, for the full balance of his account. Of course this is fraud and completely illegal, but just the fact that it's so incredibly simple is troubling.

I'm sure if you tried to pull 50 million dollars from PayPal's account, they would put a stop transfer on it and block it. But what if you tried to pull 50 thousand from an average person who only checks their statement once a month? The ACH would have already cleared, and the thief would have sent it to an overseas bank where he could withdraw the money and disappear.

This seems like a really outrageous system and I can't believe it's so simple to withdraw money from other peoples' bank accounts. Wtf?
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It's been this way for years.

ABA(American Bankers Association) Rules allow you cancel the ACH if a request is put in within 48 hours. If 48 hours go past you are SOL.

You would most likely be able to get it back with a fraud report. Depending on the banking institution in went through it could take some time and some work.

It's just a number anyways...
 
This thread is probably pretty counter productive to OP's sig, but anyway, ACH is not a wire transfer.

ACH = like a CC charge can be reversed. Like a CC, all you need is the acc info to get it going, just that with ACH you need less info. Both generally have user level protection by limiting amounts/algorithmically checking amount/history/location/type of purchase and then calling to verify large purchases and not letting them fully go through the food chain until it is clear it isn't fraud.

Wire Transfer = Generally quite unrecoverable, only started by acc owner/authorized user as far as I know.
 
This thread really does make OP look like an offer owner that is totally clueless about banking. That must be really attractive to affiliates interested in submitting their pre paid gift cards to his nutra trial rebill offer.
 
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