In the age of digital payments, it is difficult to imagine that traditional checks are still used by anyone. This is an especially unusual concept given that lots of finance experts think that the days of cash are drawing to a close.
In spite of this, billions of dollars are still transferred via check each year. And even with the current rate of decline, it seems unlikely that they will be completely rejected by consumers and businesses any time soon.
So why is America’s love affair with checks still burning bright, and what factors might change this in the future?
Technology has actually made checks more accessible
It might seem counterintuitive, but checks are actually being sustained and perpetuated as a payment method thanks to the digital tech that has also led to their gradual decline.
For example, ordering checks online is quicker, easier, and more affordable than getting them directly from a bank. Anyone that still uses them can thus continue to access checks readily without having to visit a brick and mortar location.
Likewise, advancements in tech have made it straightforward for banks and businesses to scan checks and receive the amount speedily, rather than having to wait protracted periods for the amount to clear.
Some bank customers even use checks to rapidly send money between more than one bank account, because smartphone tools allow them to scan the document and receive the transfer in less time than other methods.
Having a physical record of a transaction is reassuring
For plenty of people, especially older generations, checks are a tried and tested financial document that leaves you with tangible evidence after sending or receiving money.
This might not matter to most who have grown up with internet access and digital services at their fingertips, but for anyone who came of age in the analog era, checks earn their trust more than online payment platforms.
Checks offer a time-delayed option for payments
When writing checks, you may wish to provide someone with a means of taking payment but have the intention of them not actually cashing the check until days, weeks, or months later.
This can be useful for paying rent, among other things. You might also ask that a short delay before cashing in be implemented because you do not currently have the necessary funds in your account. It is all about finding convenience and taking control in situations that might otherwise leave you powerless if you were solely beholden to digital payments.
Costs are kept to a minimum
Arguably the most important reason for paying by check, or conducting any kind of transaction using this legacy method, is that you can do this without having to pay a penny. The same goes for the receiving party; most banks do not charge for processing checks, or levy only a minor fee for this.
In comparison, the fees charged by online payment platforms can be steep. In a business context, or even when sending money between two people, having to pay a percentage of the transaction to the platform provider can be prohibitively expensive.
The same goes for paying via credit card. Fees for transactions are commonplace both at online outlets and real-world stores. With checks, Americans can minimize the overheads of doing business or paying for goods and services.
So there you have it; while it seems likely that as the older generations are replaced by digital natives, checks will continue to shrink into insignificance in terms of usage levels, they remain widely used in the US, and are also present in many places worldwide.