Positive Pay Explained: Payee Validation, Exceptions, and Setup Tips

What Positive Pay does

Positive Pay is a bank service that helps detect check fraud by matching issued checks against items presented for payment. When something doesn’t match, it becomes an exception you can pay or return.

Key choices during setup

• Issue file cadence: daily is best for high check volumes.
• Exception workflow: who reviews, who decides, and by what cutoff.
• Payee validation: where available, adds an extra layer of protection.

Implementation tips

1. Document your cutoff time and assign a backup approver.
2. Train AP on what causes exceptions (voids, reissues, amount changes).
3. Monitor the exception rate—spikes can indicate process issues or fraud attempts.