Positive Pay is a fraud detection service offered by the Cash Management Department in most banks.  The service matches the account number, issue date, check number and dollar amount of each check presented for payment against a list of items previously authorized by the paying company.

Each day, the paying company transmits a file to the bank that includes a list of issued checks to be paid.  When the checks are presented for payment at the bank, they are matched against the transmitted file.  When a check is presented that does not exactly match the four components provided on the list from the company becomes an exception item. 

Any exception item is sent by fax or image file back to the issuer for examination. The company reviews the item and instructs the bank to pay or return the check.  Positive Pay is generally regarded as a kind of insurance against check fraud losses and liability.