Positive pay is a automatic system that detects possibly fraudulent checks before they are paid. All the checks that have been reported as stolen or have payment amounts altered will be blocked.
How positive pay works?
Issuing company sends a file to bank where it has account. The file contains check numbers, dates and amounts. When a check is presented to the bank, the system compares data and informs about any discrepancy.
Reverse positive pay
Reverse positive pay is a modified concept, where the bank sends information to company about all the checks received. The downside of that system is short time for answer. The bank has to pay checks in relatively short time. Therefore classic positive pay is much more efficient in detecting fraud.
- Dias, D., & De Queiroz, R. (2006, October). A Model for the Electronic Representation of Bank Checks. In Image Processing, 2006 IEEE International Conference on (pp. 461-464). IEEE.
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