Bank accounts are verified via micro-deposits—who initiates those deposits and how does the verification process work?

The institution which is trying to verify you, would do this.

Let's say you're applying for some financial services product, and part of your application requires you to put up a credit card and a bank account.

You supply both. However, the bank needs to know that they really belong to you. So here is what they would usually do.

• They would charge your card for say $1. Now they are holding on to $1 of your funds with them.
• They Divide this into two numbers randomly so that they add us to $1, lets say for this example, the two amount are: 32 cents and 68 cents.
• They then push these two deposits (via ACH) to your account. The company pays for the ACH fees (this is part of the client acquisition cost).
• Your bank now has two deposits sitting in the bank 32 cents and 68 cents.

Since you've claimed ownership of the bank account, there should be no trouble in you logging and authenticating yourself to let the company know what the two deposit amounts are. Alternatively, you can call in, via the bank's call center and do the same.

Because you would be subjected to a series of authentication measures as provided by the bank to be able to verify the two deposited amounts, the company would assume that the account is yours and you had the necessary credentials to log-in and verify the amounts.

By confirm the the two deposits back to the company, you complete the loop of authenticating your bank account.