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The Demise of the Paper Check
The Demise of the Paper Check
At the CPI Summit in April (yes, I’m still talking about this, but I warned you weeks ago that I would be), there was a general outcry for financial institutions to “band together” and “kill checks.”
Phrases like this make me chuckle especially considering other, possibly more worthy, goals such as “save the environment” or “develop data dashboards to track and optimize green technologies,” but the logic to “kill checks” actually makes sense. From a personal perspective, it is totally inefficient to write checks when I can pay my bills online with the click of a mouse or swipe a credit card or, soon, tap my iPhone at the store. From a corporate perspective, checks create inefficiencies for both payables and receivables. However, I still carry my checkbook ready in my purse, and, according to the Association of Financial Professionals, the bulk of all B2B payments are still being made via check.
So what will it take to convince us that checks are passé?
The latest Payments Fraud and Control Survey results from the Association of Financial Professionals have me pretty convinced. According to the study, 73 percent of organizations experienced some attempt at payment fraud in 2009. Check fraud is the most prevalent form, affecting 90 percent of those organizations falling victim to payments fraud. Checks also seem to result in the largest dollar loss for successful fraud attempts.
The Payments Fraud and Control study also addresses the rates of fraud for other payment methods including consumer cards, commercial payment, travel and fleet cards, ACH credit and debit, and wire transfers. While fraud certainly exists in these areas as well, it seems to me that the advancement of fraud protection technology in these “newer” payment categories will be continuously evolving over the next decade, whereas fraud detection for check payments are as out-of-date as the payment method itself.
So maybe, it’s time to take those checks out of my purse for good.
-Martha
