What is Positive Pay? How Does Positive Pay Work?

What is Positive Pay? I’m sure you’re curious about positive pay. That is why you are here. Well, you are simply covered because you are going to know all about it today, but it would be best if you read all the content on this page to get important information.

What is Positive Pay?

So first I am going to start by explaining what it is and also how it works and some other important information concerning it.

What is Positive Pay?

It is simply a banking feature that has been designed to help business owners protect themselves against fraudulent checks being written on their accounts. You can then give your bank details for each check you write, and the bank verifies that your information matches the information on checks presented to the bank before it processes the payment.

If any items do not match up, your bank then flags them and also sends them to you for review. You can then decide if you want to accept or decline the payment. Here is a closer look at how it works and also why you might want to use it for your business.

How Does Positive Pay Work?

It simply helps business owners to safeguard their bank accounts against any losses by simply detecting suspicious transactions before they get processed.

For example, suppose Erica uses Chase for her business banking and she’s enrolled in Positive Pay (which, at Chase, is called “Check Protection Services”). Here is how the process works:

  1. Erica simply gives Chase the check number, account number, and dollar amount for every check she writes. (She either enters this information manually in her banking portal or uploads a file.)
  2. Chase then validates any checks presented for payment against the information Erica provides.
  3. If the checks match, then Chase processes the payments. If any of them does not match, Chase marks them as “exception items” and notifies Sally.
  4. Erica then logs into her account, reviews the exceptions, and tells Chase if she wants to pay or return the items.

How Much Does Positive Pay Cost?

Some banks (such as Chase) can even offer complimentary Positive Pay services for select business banking accounts. Other banks charge monthly fees, per-item fees, or a combination of the two.

For instance, here is a look at three banks’ Positive Pay programs:

Plumas Bank

Capitol Federal

First Premier

Monthly Positive Pay fee (per account)




Issued check fee (per check)


3 cents


Payee match fee (per item)


2 cents

5 cents

Pros and Cons of Positive Pay


  • An effective fraud-protection tool


  • It requires work on the business owner’s part.
  • The bank returns items if you miss the review deadline.

Pros explained

  • Effective fraud-protection tool: It can then be an ideal way for companies to simply be able to safeguard their financial accounts against fraud, counterfeit checks, and also other liabilities. Think of it as an added form of protection for your business. Although it is not perfect, it does help.

Cons explained

  • It requires work on the business owner’s part: Each time you simply write a check, you are then required to simply give the bank the information it needs to validate the check—by manually entering the details or simply by uploading a file. Although this can then take as little as a few seconds, it still simply requires more work from the business.
  • The bank returns items if you miss the review deadline: The biggest problem with positive pay is that you typically have to tell the bank that same day—sometimes by 12 p.m. or 4 p.m.—if you want them to simply return or process flagged items. If you miss the deadline, your bank will usually return the items, which may cause financial problems or simply slowdowns for your business.

Reverse Positive Pay vs. Positive Pay

Both Positive Pay and Reverse Positive Pay are simply tools you can use to protect your business from check fraud, but the two have some technical differences.

With Positive Pay, your bank will then review every check presented for payment and even verify that the details match the information you have simply provided to the bank beforehand. Reverse Positive Pay requires you to set a payment threshold. Your bank will also only notify you when it needs to process checks over that limit.

Another major difference is how the banks handle flagged checks if you do not review them by the deadline. It also declines an unapproved check, returning it to the issuer (potentially charging you a returned item fee in the process). With Reverse Positive Pay, a bank will typically process the payment anyway, even if you do not respond within the posted time frame.

Positive Pay

Reverse Positive Pay.

The bank reviews all checks presented for payment.

The bank only reviews checks over a certain payment threshold.

If you don’t review flagged checks by the cutoff time, your bank returns the item

If you don’t review flagged checks by the cutoff time, your bank processes the item.

Whether your business can simply benefit depends on how many checks you write and also how susceptible you think you might be to fraud. You will then need to determine if the monthly fee, if applicable, will serve to offset the potential for fraud.


How Long Does Positive Pay Take?

Within three business days: The service is then usually active within three business days. Important: If RICE has been selected, immediately upon enrollment, all checks presented for payment will then appear as exceptions for you to review and provide a decision.

Do Banks Charge for PPay?

This system simply acts as a form of insurance for an organization against losses, fraud, and other liabilities. There is also generally a charge incurred for using the service, although some banks now offer it for free.

How Do You Use the Positive Pay System?

The system simply involves re-confirming key details of the cheque by the drawer to the bank, which would even be cross-checked with the presented cheque at the time of payment processing.

What Exactly Is A Reverse Positive Pay?

This is a fraud mitigation service that can provide detection of fraudulent, altered, or counterfeit checks by simply creating and even posting a daily report of presented items (excluding checks cashed at a Huntington Branch) to Business Online.


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