Why Digital has not fully displaced check payments yet

January 10, 2023

The Association For Financial Professionals published an article on the trend of payment methods. Entering 2023, check payments are still very much in use throughout the global economy. Many analysts had predicted that paper payments would be a relic of the past much like the typewriter by 2010. 

While digital payments like ACH provide speed, the article explores the factors that are keeping a lane open for paper payments. Most things digital require participation in a network of some type. Not every financial institution is covered by ACH. Vendors may also use smaller regional banks that fall outside of the network. This could mean they won’t accept your digital payment. This can often be the case in the space of international transactions. 

Cost is another factor for smaller businesses, as described in the article:

"As a small business owner my bank gives me checks for free, but they charge me to do ACH. There has to be an incentivization to move away from paper,” said another treasury professional.

The article also describes remittance information as another reason some companies prefer paper payments:

Another piece of the process under consideration is remittance information. How do you send remittance information for digital payments? The majority of organizations send it via email, both encrypted and unencrypted. One of the reasons email is still so prevalent is that it's ubiquitous and free, though the information people need when payments are sent varies greatly.

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