Check Positive Pay and Why It Is Important

Check Positive Pay is a vital fraud prevention tool for business accounts, especially checking accounts. Here’s why it’s important:

1. Prevents Check Fraud. Positive Pay helps detect and stop unauthorized or altered checks before they are paid. Businesses submit a list of issued checks (check number, date, amount) to the bank, and the bank only pays items that match the list. If there’s a mismatch, the bank flags it as an exception.
2. Reduces Financial Loss. Check fraud can result in significant losses. With Positive Pay, fraudulent checks are caught early, businesses avoid paying for counterfeit or altered checks, and funds are protected and not drained by unauthorized payments.
3. Enhances Internal Controls. By requiring check issue files, Positive Pay enforces better accounting discipline and tracking of outgoing payments. It adds a second layer of verification and helps spot internal fraud or errors.
4. Maintains Account Integrity. Positive Pay: Keeps your account in good standing. Helps avoid overdrafts caused by fraudulent items. Prevents disruption to business operations from account compromise.