Understanding Positive Pay

Technology has increasingly facilitated the ability of criminals to create counterfeit checks and false identification that can be used to engage in fraudulent check activities. As a result, companies must adopt practices to protect against check fraud. Positive pay can provide this protection for companies by enabling them to create a file of check information that their banking institutions can use when determining whether to issue payment for checks.

When you use positive pay, you create a file for your bank that includes information for each check that you printed during the day, such as check number, date, amount, and account number. The bank compares the information on the checks that they receive with the information in this file, and if the information for any of the checks does not match the file, the system does not pay the checks.

You run the Generate Positive Pay Text File program (R04586) to create the text file that you send to the bank. After you run this program, you use the Text File Processor program (P007101) to copy the text file to a specified location on your PC. After the text file has been copied to your PC, you can save it in the format required by the bank.