Exploring Positive Pay with Guest Sean Carter
Wrestling Payments Podcast: Season 3 - Episode 02
Check fraud is skyrocketing, and financial institutions are scrambling to keep up. In this episode of Wrestling Payments, host Joseph Casali sits down with Sean Carter, President & CEO of NPG, to unpack why fraudsters are winning—and how banks and businesses can fight back. Carter explains the alarming rise in fraudulent checks, the organized crime networks behind them, and why simply “not writing checks” isn’t a realistic solution for many businesses.
The conversation dives into Positive Pay, a tool designed to prevent check fraud before it happens. Carter shares firsthand experience with fraud prevention, including how NPG caught a fraudulent check that would have cost years’ worth of fees. The discussion also highlights the surprising gaps in adoption—many banks assume businesses won’t pay for fraud prevention, while businesses often don’t even know the service exists.
Casali and Carter wrap up with key takeaways from a recent fraud prevention survey, revealing why businesses hesitate to adopt protective measures and what banks can do to improve adoption. Tune in for expert insights on keeping your business’s payments secure.
Download Episode Transcript
Guest-at-a-Glance
💡 Name: Sean Carter
💡What they do: President & CEO
💡Company: NPG
💡Noteworthy: Leads fraud prevention, audits, and risk assessment for banks and fintechs.
💡 Where to find them: LinkedIn
Key Insights
Check Fraud is Organized Crime, Not Random Theft
Check fraud isn’t just small-time criminals altering checks—it’s a sophisticated, organized effort. Criminals steal checks through targeted mailbox break-ins, sometimes even at gunpoint, and use advanced methods to wash, alter, and deposit fraudulent checks. Many businesses still assume check fraud is a rare occurrence or that it won’t happen to them, but fraudsters are systematically exploiting weak security measures in the payment system. Sean Carter emphasizes that stolen funds aren’t just lost money—they fuel activities like drug trafficking and other criminal enterprises. This highlights the urgent need for businesses and financial institutions to take proactive security measures rather than waiting until fraud happens to take action.
Positive Pay Works—But Many Businesses Don’t Use It
Positive Pay is a proven fraud prevention tool that helps businesses verify checks before they clear. According to Carter, companies using Positive Pay see a significant reduction in fraudulent transactions. Despite this, many businesses either aren’t aware of it or believe they won’t be targeted by fraud. The episode reveals a disconnect: financial institutions assume businesses won’t pay for fraud prevention, while businesses often don’t even know the service exists. The data supports Positive Pay’s effectiveness, yet many companies only adopt it after experiencing fraud firsthand. Carter argues that banks should be more proactive in educating clients and even consider requiring a waiver if businesses opt out, ensuring they understand the risks.
The Hidden Costs of Check Fraud Go Beyond Stolen Money
When fraud occurs, it’s not just about losing money—it creates disputes, damages bank-client relationships, and leads to costly legal battles. Carter explains that fraud victims often face unexpected costs beyond the stolen amount, including time spent investigating fraud, reputational damage, and potential double payments if a vendor’s check is altered. Financial institutions that fail to offer strong fraud prevention tools also risk losing business, as companies may seek banks with better security measures. The episode underscores the need for a mindset shift: fraud prevention should be seen as an investment, not an expense.
The Future of Payments Still Includes Checks—For Now
Despite efforts to phase out checks, they remain a crucial part of business transactions. Some vendors refuse electronic payments, while certain regulations make paper checks easier to track for reimbursement. Carter shares a personal experience where his company struggled to prove ACH payments met compliance requirements, forcing them to revert to checks. This highlights why eliminating checks isn’t a simple solution. Instead, businesses need to balance modernizing payments with securing the check processes they still rely on. Carter stresses that while checks may eventually disappear, businesses must protect themselves now rather than waiting for the transition to happen.
Episode Highlights
The Growing Threat of Check Fraud
Timestamp: [00:02:00]
Sean Carter and Joseph Casali discuss the rapid rise of check fraud and the increasing sophistication of criminals involved. Carter explains that fraud is no longer a small-scale operation but an organized effort that takes advantage of weak security measures. Criminals steal checks from mailboxes, manipulate them, and use advanced forgery techniques to cash them. Businesses often underestimate the risk, assuming fraud won’t happen to them until it’s too late. Casali points out that while digital payments have reduced overall check usage, businesses still rely on them heavily. The discussion emphasizes the importance of awareness and prevention before fraud occurs.
"I think, disagree with me if you want, uh, that check fraud is out of control and, and yeah, it's out of control and it's going to stay out of the, out of control. So we're here a little bit to talk about what can folks do with, uh, to help prevent check fraud?"
Why Businesses Resist Fraud Prevention Measures
Timestamp: [00:24:00]
One of the biggest challenges in fraud prevention is convincing businesses to adopt solutions before they become victims. Carter highlights that many businesses assume fraud prevention tools are unnecessary or too costly, only to reconsider after suffering financial losses. The conversation reveals a major disconnect: financial institutions believe businesses won’t pay for fraud prevention, while businesses often aren’t aware that such services exist. Banks assume a lack of demand, leading to limited promotion of fraud prevention tools. The result? Businesses face unnecessary risks due to lack of education and awareness. Carter suggests that banks should require businesses to acknowledge the risks of opting out, making fraud prevention a more active discussion.
"Do we have a banker thinking somebody's not going to want the product because of cost, but they're not actually offering it because they assume it's a no, and now they say it's because of cost, and the other side is, I didn't even know you had it."
The Role of Banks in Stopping Fraud
Timestamp: [00:17:00]
Banks play a crucial role in fraud prevention, but not all financial institutions actively promote security measures. Carter explains that banks need to do more than just offer fraud prevention tools—they need to educate customers on why they matter. The conversation reveals that many businesses who fall victim to fraud only adopt security solutions afterward, rather than proactively protecting themselves. Casali argues that banks should take a more aggressive stance, potentially requiring businesses to sign waivers if they refuse fraud prevention services. The discussion highlights how financial institutions can bridge the gap between offering solutions and ensuring businesses use them effectively.
"I think when we look at this to say, maybe there needs to be a renewed focus on this product. And I do think there's enhancements that need to be made. And like you said before, we don't want to make this a commercial for positive pay. We're just going by our experience."
Why Checks Aren’t Disappearing Anytime Soon
Timestamp: [00:19:00]
Despite the push toward digital payments, checks remain a staple for many businesses. Carter shares a real-world example of how an ACH payment caused unexpected complications during an audit, leading the company to revert to checks for certain transactions. Many vendors still require checks due to outdated systems or regulatory hurdles. The episode highlights the tension between the push for modernization and the practical realities of business payments. Casali and Carter agree that while electronic payments will continue to grow, businesses need secure solutions for the checks they still use. The focus should be on mitigating risks rather than assuming checks will disappear overnight.
"We used to pay them by check, and it was never an issue because we would just give a copy of the canceled check, and they would have it. So this time, we had paid by ACH, and so I'm like, alright, I'm going to provide a copy of the batch."
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