Positive Pay and What You Need to Know About It
September 20, 2022
Businesses are looking for ways to eliminate the risk of losing money due to fraudulent activities on their accounts. Positive Pay can help achieve this. Positive Pay is a service used to help detect external check fraud. This tool is accessed through the online banking portal and is also monitored by the Treasury Management department at First National Bank of Michigan. It acts as a line of defense for businesses to protect against losses, fraud, and similar liabilities.
What is the Treasury Management Department?
Treasury Management refers to the banking division that assists with cash flow-related services that are offered to business customers. First National Bank of Michigan has a wide range of services available that are designed to meet the unique cash management needs of our customers.
While our Treasury Management Department has many responsibilities, one of the primary objectives is to assist businesses in managing their daily cash flows safely and accurately. One way to ensure that cash is being properly managed securely is with Positive Pay.
Facets of Positive Pay
Without proper security checks and balances like Positive Pay, a company’s funds are put at risk due to fraudsters and identity thieves who can create counterfeit checks. Positive Pay service ensures that if the check does not match the correct identifying information that the bank has on hand, the check is not honored.
If an in-clearing check does not match the dollar amount, check number, and payee name the bank has the option to flag the check and notify a business representative from your company to review the item. All items are imaged and available to view through the online banking portal. At that time, the check can be paid or returned before the item clears the account.
While Positive Pay comes at a fee for businesses, most companies find the tool well worth the investment to protect against check fraud and financial losses.
Daily Transmission of Files
The Positive Pay system is simple to use. As the business issues checks, they transmit a file through online banking containing check numbers, issue dates, payee names and dollar amounts.
When a check is presented to the bank that does not have a “match” in the transmitted file, it becomes an “exception item.” When there is an exception, the bank’s online system will notify the business via an alert, they will then review and either accept or deny the check presented.
Each day, the business is sent any checks that are deemed suspicious. By catching unauthorized checks before they have the chance to clear the account, companies can save hundreds, thousands or even more in financial losses due to fraud.
For more information about FNBM Positive pay services contact an FNBM Treasury Management Specialist today.
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