Positive Pay

Positive Pay is a fraud prevention service to help protect businesses against check fraud. The basic concept behind Positive Pay is to match the details of checks presented for payment with the information provided by the account holder. Here's how Positive Pay works:

Check Issuance Information:

When a business issues checks, they will upload a list of the issued checks that are authorized for payment within their Cash Management. This list typically includes details such as check number, issue date, payee name, and the amount of each check.

Check Submission by Payee:

When a payee (recipient of the check) deposits or presents a check for payment, the bank captures information from the check, such as the check number, amount, and sometimes an image of the check.

Comparison and Verification:

The bank compares the details of the presented checks against the information provided by the account holder during the check issuance process.

Exception Handling:

If there is a match between the presented check details and the information in the account holder's list, the check is considered legitimate and is processed for payment.
If there is a discrepancy (e.g., mismatched check number or amount), the bank flags the check as an exception.

Account Holder Verification:

In the case of an exception, the business is alerted when a mismatched check exception is presented for payment.
The account holder then has the opportunity to review the exception and confirm whether the check is legitimate or fraudulent.

Decision and Action:

Based on the account holder's decision, the bank either processes the check for payment or rejects it as a potential fraud.

The key benefits of Positive Pay for check fraud prevention include:

Early Detection: Positive Pay helps detect discrepancies before checks have cleared, allowing for early intervention in case of potential fraud.
Reduced Fraud Risk: By verifying each check against the issued check information, Positive Pay minimizes the risk of unauthorized or altered checks being processed.
Control: Businesses can review exceptions and decide whether to process the check or not, giving them greater control over the process.
Enhanced Security: Positive Pay adds a layer of security to traditional check processing, mitigating the risk of fraudulent transactions.

Businesses of all sizes can benefit from Positive Pay as part of their overall risk management and fraud prevention strategies. It's particularly valuable for organizations that issue a large volume of checks and want to minimize the risk of financial losses due to check fraud.