Lockbox Deposits streamline how your business collects and processes check payments by shifting the entire workflow to the bank. Instead of manually handling incoming checks, payments are sent directly to a secure lockbox address where they are processed, digitized, and deposited into the appropriate Passport account.

This reduces processing delays, minimizes manual effort, and improves your overall cash conversion cycle.

Your lockbox address is shared during onboarding. Contact your Account Manager for details.

Why Use Lockbox Deposits

• Faster cash flow – Reduce delays in receiving and processing check payments
• Lower operational overhead – Eliminate manual handling of physical checks and deposits
• Better reconciliation – Standardized data and document capture simplify tracking and audits
• Scalable collections – Handle growing check volumes without increasing manual effort

How Lockbox Deposits Work

Step 1: Mail Receipt

Customers send checks to your designated bank-managed lockbox address.

Step 2: Extraction & Scanning

The bank:

• Extracts checks and documents
• Creates digital images
• Shares structured data with Passport

Step 3: Matching & Review

PCE creates an External Transaction. The operations team reviews and matches it to an account

Step 4: Fund Realization

After the configured realization interval:

• Transaction moves to COMPLETED
• Funds become available to the customer

The realization interval protects against failed check settlements (e.g., insufficient funds, stop payments).

Step 5: Visibility in Passport

Users can:

• View check images
• Download correspondence documents
• Track transaction status

Reversals

If a check fails (e.g., insufficient funds), a reversal is triggered.

Reversal flows are automatically triggered when marked as Returned.

Transaction Lifecycle 

Scenarios

The following scenarios illustrate how lockbox deposits flow through the system and when intervention may be needed.

sequenceDiagram
    participant Payer as Customer / Payer
    participant LB as Bank Lockbox
    participant PCE as PCE Platform
    participant Ops as Operations
    participant PM as Program Manager

    Payer->>LB: Mail check to lockbox address
    LB->>LB: Extract, scan, digitize
    LB->>PCE: Share structured data + images
    PCE->>PCE: Create External Transaction
    PCE->>Ops: Route for matching review
    alt Match Found
        Ops->>PM: Forward for acceptance
        PM-->>PCE: Accept (status: PROCESSING)
        Note over PCE: Realization interval
        PCE-->>PCE: status: COMPLETED, funds available
    else No Match
        Ops->>PM: Escalate (unmatched)
        PM-->>PCE: Move to Reserve
        Note over PM: Manual resolution
    end

Before you begin (all scenarios)

• Your lockbox address is configured and shared with payers.
• Your webhook endpoint is subscribed to external transaction events.
• Exception account is set up for handling returns.

Scenario 1: Receive and process a customer's mailed check payment

(standard lockbox deposit with auto-matching)

A property management company instructs its tenants to mail monthly rent checks to the company's designated lockbox address. The bank receives the check, scans and digitizes it, and forwards the data to PCE. The system matches the payment to the correct tenant account.

You'll also need: Payer includes account number or reference in memo line for matching.

Webhook Notification — External Transaction created:

{
  "eventType": "externalTransaction.created",
  "payload": {
    "id": 88501,
    "type": "CHECK",
    "status": "PENDING_REVIEW",
    "amount": 1800.00,
    "payerName": "John Smith",
    "memo": "Account 91045 - June Rent"
  }
}

Accept Request

POST /v1/externalTransaction/id/{id}/accept

{
  "account": {
    "id": 91045
  }
}

Response

{
  "id": 88501,
  "status": "PROCESSING",
  "destination": {
    "account": { "id": 91045 }
  }
}

After the configured realization interval, the transaction moves to COMPLETED and funds become available.

Scenario 2: Handle a lockbox deposit that requires manual matching

(unmatched deposit moved to reserve)

A customer sends a check without including their account number or reference information in the memo. The system cannot automatically match the payment to an account.

You'll also need: Program Manager access to review and resolve unmatched deposits.

Webhook Notification — Unmatched External Transaction:

{
  "eventType": "externalTransaction.created",
  "payload": {
    "id": 88502,
    "type": "CHECK",
    "status": "UNMATCHED",
    "amount": 2500.00,
    "payerName": "Jane Doe",
    "memo": ""
  }
}

Funds are moved to reserve until the Program Manager identifies the correct destination. Once resolved, accept the deposit with the correct account ID.

Scenario 3: Handle a check reversal after realization

(NSF return after funds credited)

A vendor sends a $5,000 check that clears and is credited to the customer's account. Days later, the issuing bank returns the check due to insufficient funds (NSF).

You'll also need: Exception account configured for handling post-realization returns.

Return Webhook Notification:

{
  "eventType": "externalTransaction.returned",
  "payload": {
    "id": 88503,
    "originalTransactionId": 88500,
    "status": "RETURNED",
    "amount": 5000.00,
    "returnReason": "NSF - Non-Sufficient Funds",
    "debitEntry": {
      "id": 99001,
      "amount": 5000.00,
      "account": { "id": 91045 }
    }
  }
}

A debit entry is automatically created in the customer's account to reverse the previously credited $5,000. Return details are available via the Return List API for reconciliation.

Best Practices

• Use the correct lockbox address to ensure payments are routed accurately. Sending checks to an incorrect address can lead to processing delays or lost payments.
• Include clear remittance information (such as account number or customer ID) with every check. This enables faster and more accurate matching, reducing the chances of funds being moved to Reserve.
• Set up an exception account for returns so that post-realization reversals can be handled automatically without manual intervention.
• Monitor your Transaction listing regularly to stay updated on incoming deposits and verify that transactions are processed and credited as expected.
• Download and retain correspondence documents for each deposit. Maintaining records is essential for audit, reconciliation, and dispute resolution.
• Act promptly on unmatched or reserved deposits by coordinating with support or internal teams. Early action helps minimize delays in fund allocation.
• Educate your customers on payment instructions, including the correct lockbox address and required details, to ensure smooth and error-free processing.