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With the rise of debit cards, paper checks can seem slow and outdated. After all, checks work much like a debit card, allowing the recipient to redeem the check for the stated amount, although the actual transfer of funds can take longer. While there is an argument that paper checks are no longer relevant or useful, they are still in use, primarily by adults over the age of 55, with checks accounting for 15 percent of all non-cash payments in one of the latest studies reported by the Federal Reserve. Checks are still heavily used for large money transactions, such as payroll and rent.
Here’s a brief look at the benefits and drawbacks of paper checks and why they still have a place in today’s online-dominated marketplace.
Pros of Paper Checks
No payment solution is best for every situation. For example, debit and credit cards, while convenient, can come with a higher risk of identity theft and higher costs for merchants. The following are the most important benefits that paper checks can offer.
Cons of Paper Checks
There are many reasons that paper checks remain relevant, but they are not without drawbacks.
Takeaway
The days of paper checks dominating the payment landscape are gone, but paper checks are still relevant. Check payments offer benefits not available with other payment options, including the ability to post-date a payment, stop a payment, and create an easily traced paper trail for recordkeeping.