What is positive pay?

Positive pay is a money management service used by financial institutions to detect fraud. Banks use this service to make sure checks issued by a company are matched to those it presents for payment.

Essentially, positive pay is an insurance system for a company against fraud, losses, and other liabilities to the bank. This service is performed by ensuring that the check number, money amount, and account number of each check are matched up to a list provided by the company.