What Is Positive Pay and How Can It Protect Your Business?

Fraud is an unfortunate reality for today’s business owners, especially when it comes to checks and electronic payments. While large-scale scams might make headlines, even the smallest discrepancies in a bank account can lead to major headaches for small businesses.

Luckily, the risk of fraud isn’t something you have to face alone, thanks to services like positive pay.

In this blog, we’ll take a closer look at positive pay, explaining what it is, how it protects your accounts, and what types of businesses can benefit from using it. Along the way, we’ll share insights from Julie Macaluso, Amplify’s Vice President of Commercial Banking, who has seen how positive pay helps businesses firsthand.

What is positive pay?

Positive pay is a fraud prevention tool designed to help businesses catch suspicious activity before it impacts their accounts. Offered by many banks and credit unions, it adds an extra layer of protection by monitoring transactions and flagging anything that looks out of place—giving you the chance to step in before money leaves your account.

“Ideally, someone should be reviewing the transactions posted daily. But not many businesses have time for that,” says Macaluso. “Positive pay watches it for you.”

This can be especially important for ACH debits. 

“Most businesses don’t realize that a fraudulent ACH debit must be disputed within 2 business days for a guaranteed refund,” explains Macaluso. “After that, your financial institution will try to recover the funds, but it’s not guaranteed—and if they’re unsuccessful, your business or organization typically takes the loss.”

And with both ACH and check fraud cases on the rise, taking extra precautions is more important than ever before. Tools like positive pay are crucial because, as Macaluso points out, relying on business insurance isn’t always a safe backup plan.

 “Some assume their insurance will cover account fraud, but that’s not always the case. Policies can be very specific, so it’s important to read the fine print,” Macaluso notes. She also reminds business owners that FDIC or NCUA insurance only protects your funds if the financial institution fails, not in the event of fraud. 

Positive pay helps close those gaps, giving you more control over what goes in and out of your account—and reducing the risk of losses..

How does positive pay work?

Positive pay works by automatically reviewing the transactions—both checks and ACH withdrawals—that post to your business checking account and flagging anything that doesn’t match what you’ve authorized.

Here’s what the process typically looks like:

• For checks: You’ll submit a list of checks you’ve issued, including details like check number, amount, and payee. When a check is presented for payment, the bank verifies that it matches your list. If something is off—say the amount is changed or the check number doesn’t exist—it’s flagged for your review.
• For ACH debits: You can pre-authorize specific vendors or set up rules for what should be allowed. Any debit that doesn’t match those rules is flagged before it hits your account.

In each case, if a suspicious transaction turns out to be legitimate, you can quickly approve it. If it isn’t, you can deny the transaction before any money leaves your account. This added layer of control not only helps prevent fraud—it also gives you peace of mind knowing you have the final say over what gets paid.

Who should use positive pay?

Positive pay isn’t just for large corporations or businesses that process a huge volume of checks. In fact, it can be just as valuable for smaller organizations or those with minimal account activity.

“We highly encourage any business checking account to have this in place,” explains Macaluso. “Even if you don’t write any checks or expect any ACH debits, it is an easy way to protect your money.”

Because fraud can happen to anyone—regardless of size or industry—positive pay is a smart choice for:

• Small businesses and startups
• Nonprofits and community organizations
• Professional service providers (like law firms, accountants, and consultants)
• Any business that issues checks or electronic payments

Even if your account is relatively quiet, having in place adds an important layer of protection and peace of mind.

What other fraud prevention measures should businesses use?

Positive pay is a powerful way to protect the money in your business account, but it’s most effective when paired with other smart practices.

“You should never share your online banking credentials with anyone. Each person should have their own login for internal controls and auditing,” Macaluso reminds business leaders.

Additionally, it shouldn’t be the only safeguard that your business has in place. Building a strong defense against fraud means implementing multiple strategies together. Businesses should also do the following to safeguard all accounts and sensitive information:

• Use strong, unique passwords for all financial accounts and change them regularly.
• Enable two-factor authentication (2FA) wherever possible for an extra layer of security.
• Install and update firewalls and anti-virus software to protect your network from malware and hacking attempts.
• Limit account access to only those employees who need it and regularly review user permissions.
• Monitor accounts for unusual transactions, even if you have positive pay or other safeguards in place.
• Educate your team about common scams like phishing emails and social engineering tactics.

Fraud prevention is all about layers. By combining positive pay with strong cybersecurity habits and smart internal controls, you’ll give your business the best chance at avoiding costly fraud.

Getting Started with Positive Pay 

Ready to put positive pay to work for your business? Getting started is often easier than you might think—and well worth the peace of mind it brings.

At Amplify Credit Union, protecting your business is a top priority. Because Amplify is committed to fee-free banking for both consumers and organizations, there are no fees for using our positive pay services. It’s an easy, cost-effective way to strengthen your account security without adding extra expenses.

To get started with positive pay or learn more about Amplify’s full suite of treasury management services, contact our team today.

Positive pay is just one piece of a larger fraud prevention strategy—but it’s an essential one. With the right tools, habits, and team in place, your business can take control of account security and reduce the risk of financial loss.andscape. By understanding how fees work, asking the right questions, and choosing a banking partner, you can avoid many of the common charges that catch small business owners off guard. A few proactive steps can help you save money, simplify your finances, and focus more on running your business—not fighting surprise fees.