Positive Pay

What is positive pay?

Positive pay is a fraud prevention service where businesses submit a file of authorized checks to their bank. When checks are presented for payment, the bank compares them against the authorized list. Checks not matching the list are flagged as exceptions for the business to approve or reject before payment. This prevents payment on forged, altered, or counterfeit checks.

How positive pay works

After writing checks, you upload a file with check numbers, amounts, and payees to your bank portal. When each check is presented, the bank validates it against your file. Matches pay automatically. Mismatches generate exception alerts requiring your decision within a few hours. You review the image and either approve or return the item. The process adds a layer of verification to every check payment.

Implementing positive pay

Banks charge monthly fees plus per-item fees for positive pay. Weigh costs against check fraud risk. High-volume check writers, businesses with publicized account information, and those who have experienced check fraud are natural candidates. Implementation requires workflow changes to upload issue files promptly. The protection only works when you consistently upload before checks are presented.