From shoplifting to identity theft, fraud is rampant. The US Mail is not secure. Criminals steal checks from mailboxes. Sometimes they steal mailbox keys from postal carriers or bribe them to gain access to locked mailboxes.
Experts are recommending that small businesses not send checks through the mail. Use digital transactions instead or enlist the help of technology to protect any checks mailed.
Protecting your payment transactions is the topic of this post.
There is a technology called Positive Pay that is available to help secure your bank accounts. Positive Pay providers are listed below:
- AlphaSense
- Kompyte
- CI Radar
- Wide Narrow
- TechnoMile GovSearchAI Suite
- Intelligence2day
- SinglePoint
I happen to use SinglePoint. I’m using SinglePoint because that is the Positive Pay provider my bank integrates with. You should probably select a provider the same way – use the provider that your bank uses. There is no need to research these providers independently.
Regardless of the provider, there are two ways to protect transactions, ACH Positive Pay and Check Positive Pay.
ACH Positive Pay:
If you are using ACH transactions to pay obligations, ACH Positive Pay allows you to employ filters to restrict transactions to authorized vendors and even then, only within authorized dollar limits. Otherwise, ACH transactions are interrupted or declined.
Unauthorized ACH transactions are called exceptions. I get notification of any exceptions by email. Often the exceptions are an ACH transaction I want to complete. There is an opportunity for the user to complete the transaction manually and add the vendor to the authorized list for future transactions. Failure to act results in the transaction being automatically declined. If the transaction is fraudulent, the user can also mark the transaction accordingly.
Check Positive Pay:
We still send out paper checks. The checks are prepared in our property management software. There is an opportunity within this software to create a Check Positive Pay data file. Most accounting software packages are likewise capable.
There is a setup process to make sure the data file you create is in a format the Positive Pay provider can understand. But once this setup is complete, preparing the data file takes only seconds.
Once a data file is prepared, the file is uploaded to the Check Positive Pay provider. Now your bank has a data file of the checks you are about to mail before you mail them. As checks are returned to your bank for payment, the checks are compared to the Check Positive Pay data file. If there is a match, the check is paid. If there is not a match, an exception is generated and included in the daily Exception Report.
I get a Check Positive Pay Exception Report each morning at 9 AM. Typically, exceptions are checks we forgot to enter into the system! There is still the opportunity to manually approve the exceptions and complete the transaction.
But sometimes the exceptions are frauds. We’ve had criminals get access to our account number and routing number and write themselves checks on our account for as much as $43,000. Thankfully, the Check Positive Pay system worked as designed as these fraudulent transactions were declined.
Prior to employing Positive Pay technology, if there was fraudulent activity, we would have to close the existing account and reopen a new one. We have many mortgages and other accounts on automatic payment and this process is incredibly disruptive. Thanks to Positive Pay, our transactions are safe and the disruptions are a matter of history.
Now that your money is safe, don’t spend it going to the Super Bowl. I went to the Super Bowl for Free. Find out how I did that when my next book comes out by clicking the red email button below.