Positive pay is a system by which the bank verifies checks presented for payment against the list provided by the company of approved checks.

• A. Payment patrol
• B. Check matching
• C. Positive pay
• D. Verification control

Answer: (C)

Positive pay is a banking control that guards against check fraud by comparing checks presented for payment with a list of issued checks the company provides to the bank. The company sends details like check numbers, dates, and amounts, and when checks arrive for payment, the bank automatically matches each item to that list. If everything matches, the check is paid; if there’s any mismatch, the bank flags it for review or returns it, preventing unauthorized or altered checks from being paid. This precise mechanism—the bank’s verification against the company’s approved check data—fits the description exactly. Other terms describe more general or different ideas and don’t capture the specific bank-vs-issued-check verification process.