The Value of Positive Pay Services

Positive Pay is a fraud-prevention service that helps businesses verify transactions before they are processed. When a business issues checks, it uploads a check register file into their online banking portal. Behind the scenes, as checks clear the business's account, they are cross-referenced against this uploaded check register.

If any discrepancies are found-such as an altered amount, mismatched account number, or unauthorized payee-the check is considered an exception. To manage that exception, the business is notified and asked to review whether the check should be paid or returned. 

This proactive approach helps businesses detect and prevent fraud before it impacts their bottom line. While Positive Pay does require a few extra steps upfront, those steps are often far less costly than the time, disruption, and financial loss that can follow even a single fraud event.

A Success Story of Positive Pay

Jane, a business client, initially viewed Positive Pay as an inconvenience because of the extra steps it added. Uploading check files felt like one more task on an already busy schedule. 

Months go by and she routinely adds her check files. One morning, Jane receives a Positive Pay exception alert. A check presented for payment did not match the information her company had uploaded. After reviewing the exception, she discovered that the check had been altered. Because the discrepancy was identified before the check cleared, Jane was able to return the item and prevent a significant financial loss.

That experience changed Jane's perspective on Positive Pay. What once felt like a burden became one of the most valuable fraud-prevention tools her company uses.

For many businesses like Jane's, preventing just one fraudulent transaction justifies the effort involved in maintaining the service.

A Different Outcome When Positive Pay is Not Used

Mike, who runs an efficient business operation, dismissed recommendations to enroll in Positive Pay because it didn't seem necessary for his business.

A few months later, a vendor called asking about a payment that never arrived. After investigating, Mike discovered that the original check had been intercepted and altered. A fraudster had changed the payee information and successfully cashed the check. Mike did not immediately notice the discrepancy because the check was cashed for the expected amount.

Timing is critical when disputing fraudulent checks and recovering funds can be a lengthy and uncertain process. Had Positive Pay been in place, the unauthorized payee could have been compared against the issued-check file before the item cleared, helping flag the discrepancy for review.

While their names have been changed for privacy, both situations are actual examples of check fraud happening right here in Wisconsin.

Implementing Positive Pay in Your Business

As part of SFB's commitment to protecting its customers, the bank absorbs the monthly cost of Positive Pay. Eligible cash management clients can receive the service at no charge. To take advantage of this service, businesses should:

• Contact Treasury Management: Contact SFB's Treasury Management Department at 888.2254.0615 or email treasurysupport@sfbank.com to set up Positive Pay services.
• Regularly Upload Positive Pay File: Ensure timely and accurate submission of check details to SFB.
• Monitor Alerts and Discrepancies: Promptly review flagged transactions and take action on any discrepancies.
• Educate Employees: Train finance and accounting teams on how Positive Pay works and its role in fraud prevention.

Fraud prevention is a critical aspect of financial management for businesses. With the increasing risk of check fraud, implementing Positive Pay services is a proactive step to protect company assets. By leveraging this fraud prevention tool, businesses can strengthen their financial security, reduce fraud risks, and gain greater control over their transactions.

For more information on Positive Pay, contact SFB's Treasury Management Department at 888.254.0615 or email treasurysupport@sfbank.com.