Will Paper Checks Survive the Digital Payment Revolution?
PayPal. Chase QuickPay. Venmo. You can even send money to someone on Facebook. Every day, moving money from you to a friend gets easier and easier. Instead of needing #cash on hand to split the tab, you can just send your buddy the money from your phone once you get in your car after parting ways. These things seem commonplace enough now when dealing with smaller amounts between friends.
But what about for your #business?
With the continual upgrades to everything tech, some people within the industry suspect that we could be on the cusp of a “paperless society” financially - even between businesses. But so far, that doesn’t seem to be the case. Recent research shows that most business still tend to pay their vendors the good old-fashioned way - with paper #checks.
Depending on what research you look at, the number of businesses writing checks to vendors could get close to 97%, even as technology encourages us to try new ways to send money and make payments.
That being said, now wouldn’t be the first time some new #tech and trends threatened the golden standard of pen and paper. In talking about services like Venmo, we completely overlook the fact that checks have already come across some pretty significant threats - including the #credit card. To figure out if paper checks will prevail in the future, we look to find out why it’s survived so far.
1. Checks are Cheap
One of the biggest reasons most businesses report that they use paper over plastic, or any other payment method might be the simplest - to save #money. Using other services - though newer, flashier, and more convenient - tend to incur #fees and charges that businesses want to avoid. Why chew into your bottom line making a payment, when a tried and true method already exists that will get you where you want to be, without extra fees?
2. You Know What You’re Getting Yourself Into
Another reason businesses tend to be pro-paper is similar - #risk aversion. We know exactly how checks work and know exactly that they will work. With newer paperless services, there’s a degree of uncertainty. Plus, businesses want their vendors to feel confident that they’ll be paid without hassle. Convincing a vendor to download an app or to trust a new model can seem like an unnecessary test of trust, when you could just write a check and move on to the next item on your to-do list. #Reliability is probably the biggest contributor to the staying power of paper checks.
But is a concept nearly three centuries old still our best bet for payment?
In an age where people upgrade phones annually, it does seem odd that a pen and paper-based payment method still is used predominantly in business.
Add the fact that most people have all but abandoned paper checks for everyday purposes in exchange for online banking and bill pay and it makes you wonder when businesses might begin to move their money the way people do. Most people cite #convenience as the major contributing factor for their choosing to send money to friends and family using services like Venmo, and to pay bills with automatic credit transactions. The #money is sent and received nearly instantly - most smaller amounts can clear the very same day.
Compare that to checks, when you include the time it takes to physically deliver it + the time it takes for the funds to clear, peer transfers seem like moving in light speed.
A payment method that could allow a vendor to receive money into their account at the moment a service is provided seems game changing, and the technology exists already.
The question is: when businesses will trust a model or service enough to fully transition from pen and paper to paperless?