Skip to content

Positive Pay

Answered by: 

What is a positive pay system?

Positive pay systems are a powerful tool for fighting check fraud. As the incidence of counterfeit checks continues to increase, more and more financial institutions are employing such tools to help reduce their losses. In essence, a positive pay system allows a bank to compare checks presented against its commercial customer's account against items the customer indicates it has written. It will uncover instances where the amount has been altered, a counterfeit has been created using a different check number, or the payee name does not match.

The customer transmits a file that reflects all the checks it has written. The data elements may vary from one piece of software to the next, but typically it will include the date, amount, payee name, account number, and check number. Before the institution pays a check drawn on the customer's account, it compares the information on the check against the data in the file sent by the customer. If the information doesn't match, further investigation is warranted before the check may be paid.

Using special software for this task makes it easy to do the reconciliation, and the investment you make in the software should be more than offset by a reduction in fraud losses.

You'll find a selection of Positive Pay software offerings in BOL Vendor Connect.

First published on 10/7/02

First published on 10/07/2002

Filed under: 
Filed under technology as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics