What is positive pay?
Positive Pay is a widely-used fraud detection tool that can help protect your business from unauthorized checks and payments fraud. It’s an automated system that allows banks to detect altered and counterfeit checks before they are cashed. The system acts as a form of insurance for a business against fraud, losses, and other liabilities. Essentially, it’s the bank’s best defense to help prevent check fraud by examining every check presented for payment.
How does positive pay work?
A positive pay system compares and verifies the checks your business issues to the checks presented for payment against your account. Then, the bank will notify you of any discrepancies. Every check presented for payment is verified against your positive pay data file provided to the bank. This includes checks presented at the teller line and those processed at the bank office. Positive Pay will prevent payment of duplicate checks and protect against lost, stolen or altered checks as well.
Banks use Positive Pay to match the checks a company issues against those that are presented for payment. It does so by verifying the check number, account number, and dollar amount of each new check against the check issue file provided to the bank. In many cases it also matches the Payee name as well. If the check details do not match, it is sent back to the issuer for review and verification. Positive Pay is offered by most banks and ensures your money and your payments are protected.
Is positive pay worth it?
Positive Pay enables your business to stay one step ahead of criminals and protect your cash flow. Implementing strategies today to ensure protection in the future means less room for error. While every instance of fraud cannot be prevented, Positive Pay can dramatically minimize your risk and keep your finances safe. So, is it worth it? Yes! We are finding that more organizations and finance teams are implementing a positive pay system to simplify the check cashing process, reduce errors, and save on labor costs. Other key advantages include:
- Check verification: Every check presented for payment is verified against your positive pay data file provided to the bank. This includes checks presented at the teller line and those processed at the bank office. Positive Pay will prevent payment of duplicate checks and protect against lost, stolen or altered checks as well.
- Immediate fraud detection: Positive Pay dramatically reduces the chance of you becoming a victim of check fraud – putting you one step ahead of the criminals.
- The decision is always yours: You always have the final call with Positive Pay. Questionable payments are flagged by your bank before the funds are drawn from your account. Your business can always decide whether to accept the check or not.
The bottom line
Positive Pay is the bank’s best defense to help prevent check fraud by examining every check presented for payment. Positive Pay compares and verifies the checks your business issues to the checks presented for payment against your account. The bank will notify you of any discrepancies.
When used together with high-security check stock, Positive Pay can dramatically reduce your businesses’ risk of fraudulent activity and payment fraud.
Positive Pay enables your business to stay one step ahead of criminals and protect your cash flow. Implementing strategies today to ensure protection in the future means less room for error. While every instance of fraud cannot be prevented, Positive Pay can dramatically minimize your risk and keep your finances safe.
At Checkrun, our ongoing commitment to advances in technology means you can count on us to secure your financial information. Our positive pay file generation can help your business make secure payments and reduce the risk of payment fraud. Learn more about Checkrun Positive Pay.
