Positive Pay

Positive Pay is an automated check-matching service that will identify any check that was not legitimately issued or has an altered dollar amount. The check issuer sends the bank disbursement information (check amount and check number) immediately after each check run. The information allows the bank to validate check numbers and payment amounts before a check is paid. Positive Pay is the most effective fraud-fighting tool available today.

Barriers to Positive Pay
There are generally two primary obstacles to using Positive Pay. The first obstacle is cost; the second is the lack of ability to transmit the data to the bank.

Regarding cost: Most banks charge a fee for Positive Pay, though more banks are seeing the wisdom of offering Positive Pay (but not full reconciliation) for free. Many companies object to this fee. They might well consider it an "insurance" premium to guard against check fraud losses. When a company uses Positive Pay in combination with highly secure checks, they are shifting their liability for fraud losses back to the bank. Banks are willing to accept that responsibility because there is almost no chance of loss, except from altered payees. Highly secure checks guard against altered payees.

Regarding lack of ability to transmit check issue data: Several software companies offer turnkey packages to transmit issue data after each check run. Prices and sophistication vary, from $12,000 for a multi-location disbursement system to $1,300 for a simple, stand-alone system connected to a PC. With Y2K issues completely absorbing all programming time, you should seriously consider a separate system. There are several companies that offer this kind of software. For information on some of the better systems, please call us at (800) 949-2265, or E-mail: info@safechecks.com.