National Check Professional (NCP) Certification Practice Test

Which type of positive pay matches the payee name from the issue file to the payee name on a check?

1. Standard positive pay

2. Reverse positive pay

3. Payee positive pay

4. Negative pay

The correct answer is: Payee positive pay

Payee positive pay specifically matches the payee's name from the issue file with the payee name printed on the checks presented for payment. This type of positive pay is designed to further enhance fraud detection by ensuring that the check is not only from an authorized issuer but also that the recipient's name on the check matches what was originally issued. In practice, when organizations implement payee positive pay, they submit a file of issued checks, including details such as the amount and the payee name. When checks are presented for payment, the bank cross-references the details with the information in the issued file. If there’s a discrepancy in the payee name—even if the check is a valid and properly formatted check—payment may be flagged for further review, thereby reducing the risk of unauthorized payments. Other types of positive pay, such as standard positive pay, generally only verify the check number and amount against the issue file without checking the payee name. Reverse positive pay focuses on notifying the issuer of checks presented for payment so they can confirm authenticity, and negative pay typically involves stopping certain types of transactions based on predetermined criteria rather than verifying payee names.