What is Positive Pay and How does it work? – AFS

What is Positive Pay?

Positive Pay is a service provided by your financial institution that proactively monitors your payments and payment information for irregularities. The purpose is to help prevent potentially fraudulent payments from being dispersed.
Essentially, using a Positive Pay solution, businesses can get real-time notifications when payment information – including routing numbers, account information, amounts, or other details – are at odds with the normal run of business. If there are any red flags, businesses have control to review and confirm the payment before the payment is sent.

Why Use Positive Pay? 

Positive Pay allows businesses to seamlessly and better secure their payments and reduce the likelihood of fraud and/or financial loss.
Businesses have a lot of payment relationships to maintain but don’t have the controls in place to proactively monitor their payments. With so much fraud against U.S. businesses taking place – including business email compromise, vendor fraud, and payroll fraud – it’s a good idea to consider basic fraud controls.

How Does Positive Pay Work?

Positive Pay is easy-to-use. Here’s how it works:
1. Contribute. Your financial institution can work as a hub and contribute/update item data on behalf of your business or your business has the option to contribute/update items themselves. This is done throughout the lifecycle of the item, where it is monitored accordingly.
2. Query. As payments are made on a monthly, weekly, or daily basis, Positive Pay allows your financial institution to track disbursements on your behalf for updates to payment information. As a financial institution receives a check and ACH payment, Positive Pay processes and queries the item against the Positive Pay source data.
3. Alert. If payment information is changed or altered compared to the information contributed by your business, the financial institution (or the business directly) will be alerted in real-time, prior to the disbursement of funds, for further investigation.

Where can Positive Pay be Used?
Positive Pay solutions can monitor your regular ACH and check transactions.