What is positive pay?

Positive pay is a fraud prevention service offered by many banks to help businesses protect themselves against check fraud. The process involves a business providing their bank with a list of checks that they have issued each day. When checks are presented for payment, the bank compares the details on the checks with the list provided by the business. If the details do not match, the bank will contact the business to confirm if the check is legitimate before processing it.

Positive pay helps businesses prevent unauthorized or altered checks from being cashed, reducing the risk of financial loss due to fraud. It is an effective tool for businesses of all sizes, especially those that issue a large volume of checks.

While positive pay may incur an additional cost, the protection it offers can save businesses money in the long run by preventing losses from fraudulent activity. It is important for businesses to work closely with their bank to establish and maintain an effective positive pay system to ensure the security of their financial transactions.