What is Positive Pay?

Check fraud has become an enormous concern for businesses in the last few years. That’s because checks are the payment method most susceptible to fraud, with 66 percent of payments professionals impacted by check fraud activity in 2020. Positive pay can protect business owners when processing check payments. But how does it work?

Positive Pay, Explained

Positive Pay is a cash management service used by financial institutions like community banks. Available to business banking customers, Positive Pay analyzes checks issued by companies and returns payment if it suspects fraud. There is usually a fee to use this service, but it provides businesses with a financial safeguard when processing payments from customers, clients, suppliers, and partners.

Here’s how it works: Positive Pay checks the payment amount on a check, the check number, and the account number associated with the payment. If these three elements don’t match, the financial institution doesn’t clear the check. The person presenting the check can then ask the check issuer to verify their details. The financial institution can then process the payment again.

What are the Benefits of Positive Pay?

Positive Pay can prevent you from losing money because of fraud, losses, and other liabilities. Although you have to pay to use this service, Positive Pay could save you money in the long run, especially if it detects fraudulent checks. You can also spend less time reconciling accounts and improve your check management processes.

The FBI estimates that criminals commit $12 billion of check fraud every year, making Positive Pay a worthwhile investment for many businesses.

Should You Invest in Positive Pay?

Check fraud can have a devastating effect on your business. Investing in Positive Pay on a business account with a community bank like Vinings Bank can provide peace of mind and stop you from losing money.

Call (770) 437-0004 to learn more about Positive Pay for SMB owners at Vinings Bank.

Disclaimer: Vinings Bank has made this blog available solely for informational purposes. Its content is general in nature and does not constitute professional advice. Furthermore, the views expressed in this blog are not necessarily those of the bank, and Vinings Bank does not make any representation or warranty as to the accuracy or completeness of the information contained in this blog. Any liability, therefore, is expressly disclaimed. The information in this blog may not be current, and Vinings Bank does not undertake any obligation to update such information. No part of this blog may be reproduced, redistributed, published, copied, or duplicated in any form without the express consent of Vinings Bank.