National Check Professional (NCP) Certification Practice Test

How does reverse positive pay function?

1. The bank issues a credit to the company's account

2. The company submits a list of checks to the bank for payment approval

3. The bank sends a listing of presented checks to the company

4. The company receives an alert for each presented check

The correct answer is: The bank sends a listing of presented checks to the company

Reverse positive pay is a fraud detection service that involves the bank providing the company with a list of checks that have been presented for payment against the company's account. The company is then responsible for reviewing this list and determining whether to approve or reject the payments. This proactive approach allows the company to maintain control over its outgoing payments and helps to prevent unauthorized or fraudulent checks from being processed. The process typically operates as follows: when a check is presented for payment, the bank cross-references it with the list provided by the company. If the check is not on the list, it raises a red flag, and the company must take action, ensuring that only legitimate checks are paid. This method not only aids in fraud prevention but also strengthens overall cash management for the company. While other options pertain to actions related to checks, they do not accurately capture the essence of reverse positive pay, which centers around the bank sending a listing of presented checks for the company's review and decision-making.