Understand Positive Pay

Despite the rise of digital payments, checks remain popular in payables for several reasons:

• Legacy systems and business practices: Many companies have entrenched processes that rely on check issuance. For certain B2B payments or government transactions, checks are still the preferred or required payment method due to the longevity and reliability of these systems.
• Underbanked populations: Some individuals or businesses might not have easy access to digital payment systems, preferring checks for their simplicity and universal acceptance.
• Minimal transaction fees: Many digital payment platforms charge fees for processing transactions, but with checks, the only costs are printing and mailing. This is attractive for organizations issuing or collecting payments at scale.

However, checks come with significant fraud risks, including:

• Check forgery: Fraudsters can alter the details on a check to withdraw funds from the payer’s account.
• Counterfeit checks: Fraudulent checks can be created to mimic legitimate ones, deceiving businesses into accepting fake payments.
• Check washing: Criminals can steal checks and erase details like the payee’s name, allowing them to cash the check themselves.

You can mitigate these risks by integrating Positive Pay. This guide explains how Positive Pay works and how to implement it to prevent payout check fraud.

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What Positive Pay is

Positive Pay is an automated fraud prevention tool that matches the details of issued checks with those presented for payment. The bank or financial institution compares the check number, payee, and amount with the check-issuance file provided by the business. If discrepancies arise, the bank flags the check for further review before clearing the payment.

Most institutions offer the following:

• Check matching: Every issued check is compared to a list of checks the business has authorized.
• Discrepancy alerts: Any discrepancies between the check information and the records trigger alerts for manual review.
• Prevention of altered checks: It helps detect alterations to checks after they’re issued by verifying key fields like the amount or payee.

These functions help keep businesses secure

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How Positive Pay works

By verifying the check’s details, Positive Pay reduces the likelihood of fraudulent transactions being processed.

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Reporting

Use following fields from the Payout Query endpoint response to get check number information.

{
   "paymentDetails": {
       "totalAmount": 100,
       "CheckNumber": 1234
   },
   "CreatedAt": 2022-07-01 15:00:01
}