Check Positive Pay: The Secret Weapon Against Rising Fraud in 2025

Checks may be old-school, but they’re still a business essential. Even in a world of instant payments and digital wallets, businesses continue to rely on them. But with that reliance comes a risk—check fraud is on the rise.

According to the 2024 AFP Payments Fraud and Control Survey Report, checks continue to be the most vulnerable payment method, with 65% of respondents reporting fraud attacks involving checks.

The good news? Financial institutions already have a proven fraud-fighting tool: check positive pay. The bad news? Adoption is far too low. Only 29% of U.S. financial institutions are satisfied with their current positive pay usage rates.

It’s time for banks and credit unions to stop reacting to fraud—and start preventing it with check positive pay.

So, what’s holding back adoption? Why aren’t more businesses and financial institutions jumping on board? And most importantly—how can we fix it?

Let’s dive into the latest Datos Insights report, break down the numbers, and map out a proactive game plan.

Fraudsters Are Winning (For Now)

First, let’s talk numbers. 94% of bank executives reported an increase in business clients hit by fraud in 2023​. That’s almost everyone. And when fraud hits, it hits hard.

• Large banks (over $100B in assets) saw check fraud losses exceed $15 million at the worst​.
• Mid-sized banks (assets between $31B and $100B) lost between $1M and $3M each​.
• Smaller banks (under $10B in assets) took a hit of hundreds of thousands​.

And what’s behind these staggering losses? Check washing—the #1 type of check fraud in 2024.

Why Isn’t Check Positive Pay an Obvious Choice?

Despite these terrifying numbers, check positive pay adoption rates remain low. About 65% of financial institutions have less than half of their treasury service clients using positive pay, and 39% have less than 25% adoption​.

So why isn’t this fraud-fighting superhero getting the love it deserves?

1. Most financial institutions offer it reactively, not proactively – A whopping 42% of banks admit they only promote positive pay after fraud happens​.
2. Sales teams lack incentives  – Without bonuses, goals or mandates, most teams aren’t pushing the service.
3. It’s not always user-friendly – 35% of banks cite usability issues, making it hard for businesses to integrate positive pay into their workflows​.
4. Small to mid-size businesses (SMBs) don’t even know it exists – 23% of SMBs say their banks never even mentioned positive pay​.

What Can Financial Institutions Do? A Proactive Game Plan for Check Positive Pay

The good news? Change is coming. Over 75% of banks expect check positive pay adoption to rise in the next two years​. But they need a solid plan. Here’s how financial institutions can turn the tide:

1. Educate Business Clients (Before They Become Victims)

Right now, only 25% of financial institutions believe their business clients truly understand fraud risks​. That’s a problem. Because when fraud happens, it’s already too late.

Think about it—your clients already invest in insurance to protect their business from disasters, and in many cases, they’re required to have multiple types of coverage. So why should they second-guess protecting their business’ accounts? Check positive pay is like insurance for their bank account, preventing fraud before it drains their funds. But if they don’t understand its value, they won’t adopt it.

That’s where your financial institution comes in. You have the opportunity to educate and protect your business clients, making check positive pay a natural part of their financial toolkit. Here’s how:

• Share real-world fraud horror stories: Use data and case studies to highlight the real cost of fraud.
• Include pop-ups and alerts in online banking platforms: Remind clients about positive pay when they log in.
• Offer webinars and fraud prevention workshops: Equip businesses with the knowledge they need to take action.

2. Train Sales Teams to Be Proactive

It’s time to stop waiting for clients to ask about check positive pay and start making it a key part of your financial institution’s fraud prevention strategy. Many financial institutions only bring up positive pay after a fraud incident. Instead, your sales teams should be equipped to proactively promote it as an essential business tool.

Here’s how financial institutions can drive better adoption through sales teams:

• Train relationship managers to explain the full value of check positive pay: Enhance cash flow management, prevent bounced checks and late fees, and simplify reconciliation with automated check verification.
• Make check positive pay a required part of onboarding: Include check positive pay in new business account onboarding, making it a default setting that clients must opt out of rather than opt in.
• Incentivize sales teams: Motivate sales teams to promote check positive pay by offering bonuses, setting adoption goals with rewards, and fostering competition through performance-based incentives.

3. Require Check Positive Pay for High-Risk Clients

With fraud on the rise, high-risk businesses should not have the option to go unprotected. Yet, only 41% of banks currently plan to make check positive pay mandatory for these clients​. Given the growing threat of check fraud, this percentage should be much higher. Implementing check positive pay for vulnerable businesses isn’t just a best practice—it’s an essential safeguard that protects both financial institutions and their clients. By proactively enrolling high-risk businesses, banks can dramatically reduce fraud exposure and strengthen client trust.

Certain businesses are more susceptible to fraud due to their transaction volume, industry, or history of past incidents. These include:

• Companies with high check payment volumes: Encourage businesses such as property management firms and healthcare providers to adopt check positive pay to protect their frequent transactions from fraud. The more checks a business issues, the greater its exposure to fraudsters.
• Businesses in industries frequently targeted by fraudsters: Educate high-risk industries like construction and legal services about their increased vulnerability and position check positive pay as a necessary fraud prevention tool, not just an optional add-on.
• Clients with a history of fraud incidents: Mandate check positive pay for businesses that have already been victims of fraud to prevent repeat attacks and minimize future losses. Fraudsters often revisit businesses they’ve successfully targeted before, making proactive protection critical.

By identifying and requiring check positive pay for high-risk clients, financial institutions can take a proactive stance against fraud, rather than waiting for another attack to happen.

4. Bundle Positive Pay With Other Fraud Prevention Tools

Why stop at check fraud when businesses face multiple payment threats? Fraudsters don’t limit themselves to one attack method, so financial institutions shouldn’t rely on a single defense. Bundling check positive pay with other fraud prevention tools creates a stronger, more comprehensive layer of protection while increasing product adoption and revenue opportunities for banks.

Here’s how financial institutions can enhance their fraud-fighting strategy:

• Pair check positive pay with payee positive pay: Standard check positive pay verifies check details like amount and check number, but payee positive pay takes it a step further by ensuring the payee’s name matches what was originally issued. This added verification layer reduces the risk of altered checks and fraudsters cashing stolen checks under different names.
• Offer it alongside ACH positive pay: Digital fraud is on the rise, with cybercriminals increasingly targeting ACH transactions. Bundling check positive pay with ACH positive pay provides businesses with a holistic fraud prevention solution, protecting both paper-based and electronic transactions from unauthorized alterations.
• Package fraud protection into tiered business accounts: Instead of offering fraud tools piecemeal, financial institutions can integrate positive pay into premium business banking packages. This not only encourages adoption but also positions fraud prevention as a valuable service worth paying for—deepening client relationships and creating a new revenue stream.

By bundling these tools together, financial institutions can deliver greater value to businesses, enhance fraud protection across all payment types, and strengthen long-term client retention. After all, preventing fraud isn’t just about stopping losses—it’s about building trust, security, and a smarter way to bank.

Final Check: Time for Action

Check positive pay isn’t new—it’s been around for decades. But with fraud exploding and financial institutions losing money, it’s more critical than ever.

So here’s the bottom line: banks and credit unions need to stop waiting for fraud to strike and start offering positive pay proactively. With better education, sales strategies, usability, and bundling, adoption will rise—and fraudsters will lose.

Because let’s be honest: the only thing worse than fraud is knowing you could have prevented it but didn’t.