Positive Pay is a great way to reduce the risk of fraudulent activity on commercial checking accounts. It allows the bank to work with its customers to identify unauthorized transactions before the final payment.
Positive Pay electronically sends information to the user's e-mail address about checks posting each business day. As checks are posted, the system will verify them against the information provided by the client via a check issued file. The client creates the checks issued file, which consist of the check number and dollar amount. If the information does not match, the checks will be held pending client review and approval.
This double verification method helps protect customers and the bank against some of the most common check fraud schemes. This process is in place to ensure the customer's records match the actual checks before issuing final payment, giving customers a chance to intercept a fraudulently written check before it impacts their account.