When was the last time you wrote a cheque? If you find yourself writing one at least once a month, then you’re definitely not alone. In an age where everything seems to be driven by electronic payments, it’s amazing to think that an old method of buying things still continues to thrive. Cheques have been around for more than a century, and although there are some signs of slowing down, it appears that they’re not going anywhere anytime soon.
It’s reasonable to wonder whether people will completely move away from these small slips of paper. Studies show that consumers don’t mind switching to paperless transactions, but the same cannot be said for many businesses. The move toward electronic payments has been met with resistance, largely because of resource problems and the sheer refusal to accept a huge change in how businesses conduct everyday transactions.
Despite the steady surge in digital payments, many businesses still feel insecure about abandoning their cheques. It may be outdated, but owners think that it gives them an edge, particularly when it comes to controlling all of their transactions. Basically, a cheque serves as an instruction to your bank telling them to pay the recipient. There’s a memo field where they can write what it is for, thus allowing for easier documentation of payments.
Another reason why cheques are still alive and well is that other modes of payment come with a lot of risks. Using credit cards, for instance, may introduce security problems many businesses don’t want to deal with. Although many stores both offline and online accept credit card payments, these same stores usually allow and even incentivize customers to pay by cheque by giving discounts.
The fact that cheque payments involve a manual process also works to the advantage of business owners. Since banks typically require a couple of days to process cheques, this provides time for owners to sort out their cash flow and stay on top of all their transactions.
Although there has been a steady increase in alternative financial service providers, small business owners might feel compelled to adopt new technologies. Many providers only offer their full services to large clients, which mean small business owners cannot enjoy all the perks that come with digital B2B transactions. Ultimately, this leads to falling back on something that has effectively worked for them—cheques.
From the perspective of consumers, cheques may not be as attractive as they once were. For business owners, however, there are many reasons to continue sending out these slips of paper. Aside from providing a great sense of control, cheques also make it easy to prepare cash flow adjustments when and where necessary. Not to mention, using cheques doesn’t come with high fees, allowing businesses to save more money in the long run. They might not be the most convenient option compared to electronic payments, but cheques continue to serve businesses well—and the trend doesn’t seem to be dying out in the near future.