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Businesses fight back against fraud with positive pay system

Today’s business owners face a daunting fight against fraud. Check fraud is rising sharply, even as check use has decreased among businesses. At the same time, increased digital transactions have led to higher rates of cyberattacks against businesses.

In our rapidly evolving digital landscape, staying ahead of these threats is essential. That’s where a Positive Pay system comes in, a proactive fraud prevention tool. It detects fraudulent transactions before money leaves your account. Whether you run a large corporation or operate solo, dealing with fraud can disrupt your business.

Here’s a breakdown of how Positive Pay keeps you in control of your financial transactions and keeps fraudsters out.

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What is Positive Pay?

Positive Pay is an online system that helps you and your team ensure only approved ACH transactions or checks clear your business account and stops fraudulent transactions.

How does it work?

When you set up a Positive Pay account, you’ll set an approved list of vendors with parameters for those transactions. When transactions come through your account, the system will verify that those transactions match your approved list. If it doesn’t match, you’ll be asked to review it.

You will be notified if Positive Pay detects discrepancies between your transaction records and those potentially posted to your account. You will need to review the transaction and approve or reject the payment. There are two options with Bank Midwest’s Positive Pay system:

  • ACH Positive Pay: Businesses can enroll in ACH protection services, which protect you against unauthorized digital transactions.
  • Check Positive Pay: Check fraud protection is available for businesses who still rely on issuing checks.

This is a preventative measure to help protect your business against fraudsters and cyberattacks.

Can you give an example of how Positive Pay prevents check fraud?

Let’s say Sarah runs a flower shop. She runs the business alone, so she only issues checks to her suppliers for her inventory. One day, she receives a notification from her Positive Pay system alerting her to a potentially fraudulent check presented for payment. When she reviews the alert, she sees the image of the suspicious check. The check looks legitimate, but she doesn’t recognize the name written on it, and the signature appears to be forged.

She returns the transaction with a click of a button and continues her busy day.

Can you give an example of how Positive Pay prevents ACH fraud?

Alex runs a craft woodworking business. He leads a team that makes cutting boards, frames, and signs for an online store. Most of his cash outflow is digital, automatic payments.

One morning, Alex responds to email orders and receives a notification from the ACH Positive Pay system. It flagged a suspicious transaction that appeared to be from a utility company. As he reviews the alert, he notices a few red flags. The timing was off from their typical payment, and the amount was higher than usual.

He rejects the transaction through Positive Pay, closes his laptop, and hops to a meeting with one of his team leads.

How would I use it day-to-day?

Positive Pay is designed to be simple and integrate seamlessly into your business. Its easy to access for Bank Midwest customers, simply log in to Business Online Banking or use the business mobile app to access the Positive Pay service.

If you’re a solo entrepreneur who can’t keep track of the books daily, this system is a second check that proactively reviews transactions alerting you when your attention is needed.

In larger companies where several transactions happen daily, Positive Pay gives your team a real-time opportunity to review abnormal transactions and streamline monitoring for your accounting team.

If you enroll in ACH Positive Pay protection, you’ll set up some guidelines about what is ‘normal’ for your business. Add companies to an approved list or block unauthorized companies. Set up transaction parameters such as amount limits, frequency, and start and end dates.

With Check Positive Pay, you’ll upload a file with the checks issued on the business account or manually enter checks in the Positive Pay system. When checks are presented to clear your account, you’ll get an alert if something doesn’t match what’s been entered so you can review and decide whether to pay or return.

Ultimately, Positive Pay saves you time by being proactive instead of reactive to fraud.

How has it helped other businesses?

Positive Pay is designed to stop fraud in any business, whether you’re a sole proprietor or a big corporation. Stacie Wolter, a fraud analyst at Bank Midwest, says, “Fraudsters don’t discriminate. They’re after everybody, so you will benefit from Positive Pay if you write checks or pay using ACH.”

Positive Pay is a secure and convenient service for helping fight against fraud yet it’s only one piece of a collection of services that fall under the Treasury Management umbrella. Read more about the basics of treasury management which summarizes everything from making ACH payments and payroll to receiving online customer payments, paying credit card statements and managing overall business cash flow.

Please contact Bank Midwest’s Business Services team to learn more about Positive Pay and other business services available — 844.238.3838.

Stories from business owners like you can give you valuable insight into your own enterprise. Listen to Dream, Plan, Live: the Bank Midwest podcast for stories, how-to guides, and advice from the experts at Bank Midwest.

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