Positive pay is an automated cash-management service offered by financial institutions to deter check fraud. It is a system that matches checks issued by companies with those presented for payment. The system compares the date, check number, dollar amount, and account number of each check presented against a list provided by the company to protect against forged, altered, and counterfeit checks. If a check is considered suspicious, it is sent back to the issuer for examination. The positive pay system acts as a form of insurance against fraud, losses, and other liabilities to the bank. Positive pay is a service provided by financial institutions to their customers, and there is generally a charge incurred for using the positive pay system, although some banks now offer the service for a reduced fee or free.

To summarize, positive pay is a system for preventing check fraud that is offered to companies by most commercial banks. It is an automated cash-management service that matches checks issued by companies with those presented for payment, and it acts as a form of insurance against fraud, losses, and other liabilities to the bank.