Positive Pay Check Fraud Detection | Provident Bank – NJ & PA

How can my business implement positive pay?

Creating and implementing a positive pay system is surprisingly easy. Usually, all your business needs to do is to contact your bank and inform them of your interest. From there, the bank takes care of the rest, including any associated fees. 

If your business uses an outsourced payment processing firm, this team may be able to assist in this process. Generally, setting up a positive pay system will take several business days, which means it’s important to plan in advance.

What are other methods for preventing check fraud?

Positive pay is one of the most popular and effective methods for preventing check fraud. However, there are additional steps your business can take to keep your check printing and processing secure. Here are a few actional steps to help you prevent check fraud:

What is positive pay system how does positive pay system for cheques work | hdfc bank

Issuing high-value cheques just got a lot safer. Effective from January 1st 2021, the RBI has introduced an electronic authentication system called Positive Pay that will allow you share the cheque details with your bank before the bank processes it. This additional security layer is meant to address the rising instances of cheque fraud that have made headlines throughout the past year. As reported by the RBI, the total volume of fraud transactions in India was pegged at Rs. 64,681 crores between April and September 2020 with forged or counterfeit cheques accounting a significant share. So, as perpetrators’ methods for counterfeiting cheques turn more sophisticated with each passing day, the launch of Positive Pay is definitely a shot in the arm for banks.

How does Positive Pay work?

According to the RBI, while most retail consumers prefer to use electronic alternatives such as NEFT and RTGS, cheques are still a popular option now. Before you issue a cheque, you need to share cheque details like name of the payee, issue date, and amount and send it to your bank via email. When the cheque is presented to the bank for payment via CTS Clearing, the bank will compare the instrument details received against the details you send. In case of any mismatch, the bank may review it for suitable action.

Key facts to know about HDFC Bank Positive Pay

HDFC Bank is fully aware of the risk posed by cheque fraud. Hence, we have put into place a robust process that is fully compliant with RBI guidelines. However, not all cheques will need to undergo verification via Positive Pay. We recommend this process for cheques with a value of Rs 50,000 and above. 
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Here are a few points to remember:

  1. Cheque details need to be submitted via email at least 24 hours before the cheque is presented for clearing.
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  2. An excel sheet with the following details needs to be attached in the email:

  • Serial Number

  • Your account number

  • Cheque number

  • Cheque issue date

  • Cheque amount 

  • Name of the payee/Beneficiary name

    3.The information needs to be submitted in English language and the beneficiary name should be in the exact same manner as written on the cheque. 

    4. Once the bank receives your request, an automatic acknowledgement email will be sent to you.

    5. On receipt of the email from the registered email ID of the cheque issuer, the Bank will cross verify the details.

    6. The Bank will accept or reject your Positive Pay request and a confirmation of acceptance or rejection will be sent to the cheque issuer via email
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    7. In case of a mismatch, the request will be rejected, and a fresh Positive Pay request can be submitted after rechecking the cheque details. Please note that a Positive Pay request needs to originate only from the registered email ID of the cheque issuer for security reasons.

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Check cheque status and stop payment instantly with HDFC NetBanking or MobileBanking:

With HDFC Bank NetBanking or MobileBanking, you can easily stop payment on a cheque with just a few simple steps. Alternatively, you can also call phone banking or approach your closest HDFC Bank branch for assistance. All you need to do is enter your log-in credentials and the cheque number, and we will take care of the rest. For instant updates on the status of a cheque you have issued, simply SMS HDFCCST along with the 6-digit cheque number. You can also use the View Cheque Status option via HDFC NetBanking. 

* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action.

What is reverse positive pay?

Reverse positive pay refers to when a business or individual is responsible for confirming the legitimacy of the check. In a traditional positive pay system, the bank is responsible. However, some businesses or individuals may request to confirm the legitimacy of the check on their own. To meet these needs, banks developed reverse positive pay.

Whenever your business issues a check and it’s cashed, your bank will notify you and wait for approval. Instead of actively notifying the bank each time a check is issued, there will be a brief window where your business can view the check and assess its legitimacy.

If your business does not take action during this window of time (usually a few days), the check will be cashed.Reverse positive pay typically costs less than ordinary positive pay, though some individuals consider the system to be less reliable.

Conclusion – what is positive pay and how does it stop check fraud?

Even in our technologically advanced world, check fraud remains a prominent issue for all types of businesses. Fortunately, banks continue to develop methods for combatting check fraud to ensure the security of their clients. Through positive pay and other innovative practices, your business can securely issue checks and maintain full financial control.

For more information about positive pay or online check printing services, visitSmart Payables or call us at 720-287-0030. We look forward to working with you and helping your business with all your financial solutions needs.

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