Positive pay allows a company and its bank to work together to detect check fraud by identifying items presented for payment that the company did not issue. In the usual case, the company electronically transmits the bank a list of all checks it issued on a particular day. The bank verifies checks received for payment against that list and pays only those on the list. The bank rejects:
The bank investigates rejected checks to find out if the items are fraudulent or in error. The bank only pays exception items approved by the company.
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