Customers Vs Banks — Who Will Win?

28 Aug Customers Vs Banks — Who Will Win?

Have you written a check lately?

Believe it or not, the earliest printed checks date back to the mid 1700’s. Some historians even say there’s evidence checks were used in ancient Rome. Any way you cut it, check writing has been around for a long, long time.

Checks can come in Quite Handy

Technically, a check is a piece of paper that contains account information, names of the payor and payee, the amount and an authorized signature. Not too many years ago, many businesses would carry “counter checks.”

Counter checks were blank forms a customer who forgot to bring a checkbook could fill out to create a check on the spot. That saved the customer from having to go back home and saved many a sale.

Are Checks ready to become Extinct?

News from the Federal Reserve, though, is that the practice of check-writing is about to disappear. It has given way to the rise of plastic cards and digital means of payment.

That sounds fine, right? Why would anyone still use a check to pay (other than to upset everyone else in line) — when a check card can do the same job?

Don’t hold your Breath though

Banks don’t like checks. Checks are a hassle to process and easy to “bounce.” Moreover, checks can be stolen and forged. Banks wish checks would go away – that’s why the Federal Reserve’s prediction is music to the bankers’ ears.

Before you burn your checkbook in anticipation of its demise, though, here are a few of the reasons checks may yet have a place in commerce:

  • Some people still fear computers and the latest technology. They don’t have enough knowledge to feel comfortable with electronic transactions.
  • Some people simply don’t trust computers or the debit card system. They prefer to stick with something they can touch and control.
  • Physical checks provide a ‘float time.’ That gives the payor time to arrange funding to cover the expense or to gain interest from the float.

Banks say the number of physical checks being written is becoming lower each year, and the process for depositing and clearing is getting faster. The Check 21 Act allows banks to use electronic images of checks, not the physical copies. Some say Check 21 is proof that the public’s love affair with checks is over.

(Going digital with checks, by the way, is saving the banking system an estimated $1.2 billion each year and it’s getting payments out to people in record speed.)

Yet companies that specialize in business forms and business printing are doing just fine. It could be that popular accounting programs (Quicken, for instance) help keep demand high… but there’s more to it than that.

Despite that Philadelphia Fed study saying paper checks will be just a memory by 2026, businesses are resisting that trend.

Businesses and consumers (the people who write the checks) like the float and they like the trackability.

While the banking system may WISH checks would go away. The Fed’s projection may prove to be a bit like the early release of Mark Twain’s obituary: a bit premature and greatly exaggerated.

What do you think? Are you still writing checks? Why or why not?

Freelance writer Abel Cane lives and works in the Pacific Northewest. Contact Abel via Twitter @BoomAlive.

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