Lockbox Banking
 |
Definition of 'Lockbox Banking'A service provided by banks to companies for the receipt of payment from customers. Under the service, the payments made by customers are directed to a special post office box, rather than going to the company. The bank will then go to the box, retrieve the payments, process them and deposit the funds directly into the company bank account. |
 |
Investopedia explains 'Lockbox Banking'As with most payment processing services, there are both pros and cons to lockbox banking.As benefits go, lockbox banking provides companies with a very efficient way of depositing customer payments. This is especially beneficial if a company is unable to deposit checks on a timely basis and/or if it is constantly receiving customer payments through the mail. On the other hand, lockbox banking can also be very risky. Bank employees who have access to lockboxes are rarely supervised, which opens the situation up to possible fraud. The fraud primarily occurs in the form of check counterfeiting because the checks that are in the lockboxes provide all the information needed to make counterfeit checks. Companies can protect themselves from such fraud by using a bank that they trust and by constantly monitoring their lockboxes. |
Related Definitions
Articles Of Interest
-
The Biggest Stock Scams Of All Time
Where there is money, there are swindlers. Protect yourself by learning how investors have been betrayed in the past. -
Identity Theft: How To Avoid It
Don't be a victim of this disturbing crime. Get insight into how perpetrators commit this form of fraud. -
Identity Theft: Who To Call For Help
If your identity is stolen, it's critical to act fast. Find out what to do if it happens. -
Online Investment Scams Tutorial
To bamboozle someone out of their money is an age-old ruse. Learn about some of the gimmicks modern-day swindlers use and avoid becoming a statistic. -
Financial Career Options For Professionals
Find out if spreading your wings to try a new career will make you soar or fall flat. -
Banks Will Be Under More Stress In 2012
The FDIC has proposed new regulations for banks. -
The Banking Industry In 2012
Major banks in 2012 can expect to lose customers as they struggle with the Dodd-Frank Act and new fees. -
Why You Should Stick With The Big Banks
Big doesn't always mean bad. We tell you four reasons why. -
The Banking System
Banks have been with us as long as money. Here is a detailed breakdown of how banks and the banking system work. -
5 Ways Banks Will Pad Their Profits This Year
Recent regulations have banks looking for new ways to make money. Find out how your banking will be affected in 2011.
Free Annual Reports
