The Outdated Check Payment Method
As digital payments continue to dominate the market, previous forms of payment have been called into question.
13:21 18 June 2020
While each method still does its expected job, advancements in payments have proven others more superior. Among the popular methods of payments, the paper check has lived an extensive life.
There are plenty of ways digital methods of payments have out-performed the reach of paper checks.
In light of the COVID-19 pandemic, more and more merchants and customers alike have opted for contactless payments where applicable. This means ditching traditional methods of payment like cash and the infamous check.
Security and Digital Payments
The perception of checks is that they have some level of security because of their traceability. While this has a thread of accuracy to it, the reality is other forms of payment have more extensive levels of security that highlight them as a more secure option.
The fact is that checks can be altered, forged, and copied. Whereas the information is processed through a virtual gateway, a check has all of the information right there to be preyed upon. Specifically, the account number is the most vulnerable piece of information that is being exposed via the use of checks.
The verification process of paper checks is murky with the ability to easily forge sensitive information. Although it may be argued that some forms of digital payments have the same issues. However, the nature of digital payments is encrypted to be traceable as well as secure with other leading measures to reduce fraud.
The Inconvenience of Paper Checks
Checks take time to process. They are dependent on banks and can be inhibited by restrictions imposed by their policies. Even with the popularity of online banking, it takes a significant amount of time to digitally deposit a check. Not to mention the uncertainty of when the recipient will cash the check. The traceability of checks is simply dated.
Ever-increasing technology has given the opportunity for payments to become more digital and accessible. Banks have gotten on board with this and created platforms for online banking. The expansion of ACH payments has given employers and merchants a new way to consistently put money into a person’s bank account, similar to the process of depositing a check. Additionally, other platforms not associated with a particular bank like Venmo or PayPal have capitalized on peer-to-peer transactions that rid the need of a middleman.
The Versatility of Digital Payments
Possibly the best feature of digital transactions is the flexibility they offer to both customer and provider. Payments are convenient and fast in comparison to physical checks. Digital offerings include ACHs, mobile terminals, virtual terminals, and eChecks.
The ability to set up recurring billing is another great feature of digital payments. In a world where most people have car payments, mortgages, and other subscriptions, it’s not unusual for the public to be familiar with recurring payments. This type of billing is now facilitated by the convenience of online banking. Negative-option billing takes the struggle out of recurring billing by automatically withdrawing the funds out of the merchant’s bank account.
As the current trend of advancing technology in the payment space continues, older staples will continue to be questioned. The physical check has come under fire as more secure, convenient, and versatile alternatives have come into focus. Digital payments have been suggested as the more popular means for society to shift to.