Positive Pay is an effective anti-fraud measure for check disbursements. The bank will balance all checks offered for payment using check issuance data Datas are updated regularly with the issuance and payment of checks. The check is paid automatically with the matching of a check serial number and dollar amount. The banks reports the check as an Exception if any discrepancies are found. On the basis of the Exceptions report banks either pay or return the checks. Review and scrutiny of Exceptions is a very important part in Positive Pay. Check issue data and check transmission is essential to minimize fraudulent possibilities. Checks issued beyond the normal check are incorporated to the Issuance Information through adequate Bank system.
In Positive Pay requires the company requires to send a file of issued checks to the bank When the checks are put for payments they are scrutinized electronically against the list of checks transmitted. The check-issue file contains the account number, check number, amount and date of issue. The check that does not match a file is an exception item and the bank sends a fax or provides an image of the exception item to the customer. The customers review the image and instructs bank to pay or return the check. Thebank charges a fee from the customers. The fee serves as "insurance premium" that helps in check fraud activities.
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