What is Positive Pay?

Why businesses use it

Check fraud is growing. In 2022, banks filed more than 680,000 suspicious activity reports about possible check fraud, nearly double the year before.^[1] A common scheme is check washing: criminals steal checks from the mail, use chemicals to remove the ink, and write in a new payee and often a bigger amount.^[1]

Positive Pay helps because your bank knows what each real check should say. Business accounts often have it so the account holder can review presented checks and approve or reject them for payment.^[2]

How it works

1. You send your bank a list of the checks you wrote. This is the check issue file. You upload it in your bank's online banking, or enter checks by hand.^[3]
2. The bank matches presented checks against your list. Checks that clear your account are matched to the issued items.^[3]
3. You decide on anything that doesn't match. You review those checks and approve or reject them for payment.^[2]

Send your file before the checks reach the bank, and check your bank's schedule. Huntington, for example, picks up uploaded issue files every hour from 6:00 AM to 8:00 PM ET.^[4]

Payee Positive Pay

Some banks also compare the payee name. When you use it, the payee name in your file must match what's printed on the check exactly.^[4] Simmons Bank says to match it exactly, including capitalization and punctuation.^[6] Limits differ: Huntington allows up to 80 characters for the payee name,^[4] and Synovus's payee match checks about the first 120 characters.^[5]

That's why the name on the check matters more than the name in your books. If QuickBooks prints a different "Print on check as" name, that printed name is the one your file needs.

Reverse Positive Pay

In reverse Positive Pay, you review the checks presented each day instead of sending a list first. The Federal Reserve's FedPayments Reporter, for example, offers a reverse Positive Pay option that lets corporate customers review check details the morning of presentment.^[8]

What goes in a check issue file

Banks ask for much the same information, but each bank sets its own layout.

• Check number, check date and amount. Huntington, Synovus and Simmons all require these.^[4][5][6]
• Payee name, when you use payee matching.^[4][5]
• Account number, when one file covers more than one account.^[4][6]
• A void or issue code so the bank knows which checks you voided. Huntington uses IS for issued and CN for void.^[4] Simmons uses a void indicator you choose, such as V.^[6] Synovus lets you enter your own codes for issued, voided and stop pay items.^[5]

Many banks let you set up your own layout

Instead of one fixed format, many banks have you map your file once in online banking. Huntington calls it a one-time mapping process.^[4] Synovus has a File Mapping screen,^[5] Simmons Bank has one in Treasury Connect,^[6] and TD Bank uses an Upload Profile, which you need before you can upload an issue file.^[7] After uploading at TD, you also select the file and click Transmit to send it to the bank.^[7]

Once your mapping is set up, every file has to match it. A file built by hand in Excel each time is where mistakes creep in.

Making the file from QuickBooks

1. Export your Check Detail report from QuickBooks as Excel or CSV, or use any Excel list of your checks.
2. Open the BankFileKit Positive Pay tool and pick your bank. If your bank isn't listed, build a layout that matches your bank's import screen.
3. Upload the report. Add your QuickBooks vendor list if your checks print a different payee name.
4. Read the file proof. Every line that will go to your bank is shown, with any problem explained in plain English.
5. Send your bank a test file first, then download your file and upload it in your bank's online banking.

Your file is read and built in your browser. Check details, payee names and account numbers never leave your computer.