If your organization has had issues with fraudulent checks, then Positive Pay may be the answer for you. Positive Pay is an anti-fraud service offered by the Treasury/Cash Management Department of most banks to detect altered check and counterfeit check fraud.
Time is of the essence in fraud detection. Positive Pay allows you to identify fraudulent items at the time they are presented for payment at your bank, rather than during the statement reconciliation process at your company.
This service works via a matching process. Your company is required to transmit a file of issued checks to the bank each day that checks are written. If a check is presented to the bank that does not exactly match all the required information in your transmitted file, it will not be paid and becomes an “exception item”. This potentially fraudulent check will then be sent to you for examination, at which point you can review the item and instruct the bank to pay or return the check.
There is generally a fee charged by the bank for this Positive Pay service. Many organizations find that the benefit of being able to help avoid check fraud losses and liability far outweighs the fee.
