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What is positive pay?
What is positive pay? Positive Payment is an automated fraud detection tool provided by the Department of Money Management to protect against fraudulent checks and ACH frauds committed by business customers and many commercial banks.
Here check payments are considered, and all three parts of the check must match exactly. Otherwise, the transaction will be canceled. That is, it checks the account number, date, and dollar accuracy of the relevant check.
This service allows your business to detect suspicious transactions. Therefore it is possible to reduce the risk of financial loss. Accordingly, a simple positive payment can be defined as a tool used to prevent check fraud.
This is a very effective and efficient method used by many check customers. It also protects the reputation of the business.
Fraudulent checks prevent criminals from receiving money, changing the money’s date or signature, and using it.
How does Positive Pay work?
As you already know, the check has a clearance process. The bank sends a check document containing check numbers, dates, and cash to their bank for checks written by customers.
When a check is submitted for payment, the check presented by the bank is compared with the check information previously transmitted by the customer.
If there is any discrepancy between the submitted check and the check file information, the bank will notify its customer of an exception report. In case of any discrepancy, the payment will be suspended, and the customer can be informed by the bank to accept the payment.
Accordingly, the business logs into the positive payment system and decides “pay” or “return” for the item. The positive payment method gives you the opportunity to exercise various controls here.
You can only block specific ACH transactions or allow specific vendors to access your account if you wish.
You can use ACH power to prevent complete fraud. Automated Clearance Home (ACH) is an electronic financial network in the United States that executes debt and debit transactions en masse.
How does positive pay cost?
There is a charge for setting up a positive payroll service account. This service cost is $ 50 per month per account. There is no processing fee for this service and the cost is not wasted due to the benefits you get from it. You can pay the fees through account analysis.
Problem with positive pay
There are pros and cons to any service. Several such issues have arisen with the positive pay system as well. The file should contain various check transactions so that the bank will know what to do when these items you submit for the payment.
If the company missed issuing a file to the bank, the bank will reject all checks that must be included in that file. The positive pay system basically protects you from bank liabilities, but they charge for this service.
IIf the file is damaged before sending it to the bank at the end of the day, the bank will forward a check to the bank teller. Perhaps such checks are rejected checks.
When a company chooses to use ACH payments to issue electronic payments, it can be problematic to eliminate the need for positive payments.
Despite these problems, positive pay is useful in situations where you choose to stop fraudulent testing.
Positive payroll format is the format used to verify the format of positive payment files imported into the banking system.
When you import a positive payment file to the relevant bank, it should correspond to the import format you selected on the positive payroll import screen.
Positive pay Bank of America
American banks will compare the payer’s name with your issued information to determine if the payer’s name can be changed.
American Banks, which have acquired this service, provide online reporting to help you easily review, identify, and electronically check fraudulent activity against your account.
If you have an account with Bank of America, get notified of any exceptions that may be required. You can also focus on accounts that are owned by email or mobile phones. This service helps to eliminate errors generated by keys and systems.
Once you have access to this service, they will provide you with the issuance of your checks using a variety of delivery methods.
Then the service will be activated as I mentioned above, and after reviewing your account, you can submit your issues and decisions online according to the decision-making period.
Other complementary services with positive payment
- Payee positive pay – This is done by comparing the payer’s name with the information issued to determine if the payer’s name can be changed.
- Account Reconcilement – This will completely reconcile the checks you have paid.
- Teller Positive Pay2 – Provides check issuance information such as serial number and amount on an automated basis to Bank of America financial center systems.
- ACH Positive Pay – To help you always contact the Internet and provides reporting. This will allow you to easily review fraudulent ACH activities for electronic returns.
- ACH Blocks and Filters – Provides greater security and control over the account.
- ARP Auto Check Return – If you have a deposit account or an account dedicated to electronic payments, you can subscribe to the Automatic Check Withdrawal Service without supervision.
How long does positive pay take?
In a positive payment system, they compare certain information with checks submitted for payment. The check you submit will be considered an “exception” if it does not match the information you provided.
If it matches the information provided, it will be accepted by the Positive Payment Scheme and will usually take effect within three business days.
Is positive pay worth it?
Criminals can easily steal, duplicate, alter, or use illegally paper checks, and it is not secure.
Until recently, positive wages were very expensive and difficult to implement due to custom computer programming and data transmission requirements and were reserved only for large companies.
Created by large corporations, positive payment checks are now used by almost every bank against fraud.
Due to the recent proliferation of positive payment software, a check could not be fraudulently manufactured or successfully modified. Oracle’s positive payment file was a great tool for many businesses to use checks without unnecessary fear.
As the complexity of positive payroll exacerbation intensified, each bank developed its own unique file transmission and requirements individually. Accordingly, positive payments have become one of the most effective tools in the fight against check fraud.
What is Payee Positive Pay?
Payee positive pay is another management system. Banking systems use it to minimize the occurrence of check fraud and can also review various aspects of a check presented for payment. This system enables banks to compare with a list of issued checks.
With the rise of various thefts and scams, it is becoming more important than ever to identify and prevent fraudulent activities.
You may not be able to prevent your organization from becoming a target. But by using positive payments and other fraud detection and control systems, you can prevent or limit financial losses from fraud.
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