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3 Key Benefits of both Using & Accepting Paper Checks in Your Business

A recent study by AllBusiness.com shows that a significant portion of the U.S. consumer base still prefers to pay for many different things with paper checks. In addition, for American businesses, the old-fashioned paper check also remains the preferred method with which they pay their vendors, as well as many other expenses like utility bills and bank loans. Believe it or not, businesses in the U.S. today still pay about half of their bills by paper check, according to a September 2014 survey by the Association for Financial Professionals.

Businesses and consumers alike know that the check system works. It’s been around for a long time, and they feel very comfortable with it,” said Magnus Carlsson, a manager at the trade group. This comfort level and familiarity seems to have staying power and will likely play a major role in the paper check being around for a long time to come, despite all of the advances in technology and automated payment systems.

There are obviously a number of different factors that contribute to the staying power of paper checks but 3 of the most common and powerful are outlined below

1. Lower Processing Fees

Credit and debit card merchant accounts charge 1% to 4% of the purchase total as a transaction fee, with an additional 10 cents to 30 cents per transaction, according to AllBusiness.com. Personal checks, on the other hand, have almost no interchange fees and let customers pay for items without needing to carry cash. For small businesses with thin margins, credit and debit fees associated with electronic payment systems can place a real burden on their overall margins, cash flow and profitability. Therefore, the ability to eliminate these fees by accepting paper checks can be very desirable to many small and mid-sized businesses.

2. Ease of Use

For consumers, even places that do not accept credit or debit cards almost always accept paper checks. Some companies, particularly smaller, personally owned ones, are simply not up to date in their payment systems even with the proliferation of services like Square and Paypal. Checks also remain popular with U.S. companies because they are easy to use. Paper checks make life easier for business owners and accounting professionals because they contain more information than many e-payments, allowing businesses to more quickly match payments and invoices, thus simplifying the month end reconciliation process.

3. Certain Customers Prefer Paper Checks

As the old saying goes, “the customer is always right” and a significant subset of the population, especially those over 40, are comfortable with and accustomed to using paper checks. Especially those who do not pay bills online like to use paper checks before plastic cards because checks give them better records and control over their spending. At least for the foreseeable future, accepting checks is a boon to business, especially when a customer base contains a lot of people that fall into the rapidly growing population of more “seasoned” consumers.

In the end, paper checks have seen a decline in usage since their heyday, but by all indications, their obsolescence is highly overrated. They remain a staple for both consumers and businesses alike and provide a proven and time tested method for conducting commerce.

Contributed and written by Tony DiDomenico. DiDomenico is the VP of Sales & Marketing at Money Transfer Systems, Inc.

Money Transfer Systems, Inc. is a national leader in electronic check re-presentment and recovery services. Throughout their nine year history, they have consistently achieved an industry leading NSF recovery rate of 75.6%. We currently partner with over 150 banks nationwide and do business with hundreds of thousands of merchants nationwide as well.

checXchange Mobile™ is their one of a kind, first to market Mobile App for NSF Check Recovery. This revolutionary App utilizes the exact same safe, secure and proven Remote Deposit Capture technology that is used in Mobile Deposit.


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