Checks and digital payments combined for a safer, more modern way to pay

"Apple Pay will change the world." "Venmo will revolutionize how consumers split a check." You’ve probably seen a headline like these proclaim the impending doom of paper checks. Yet paper checks have persisted for more than 100 years, and there is still a strong case for checks in our lives.

People think the rate of decline in check usage is increasing exponentially, but it’s stayed fairly consistent according to a Federal Reserve Payments Study and Deluxe Analysis (see image below). Part of the reason checks have been able to endure is due in part to their ability to evolve, including adding safety features. New technology such as embedded security features and the ability to digitize payments have addressed many of the efficiency and security challenges facing consumers. For this reason and more, research shows that the rate of decline in check usage is actually slowing.

Although checks will always have a place in the payments landscape, there are still ways to improve the technology and times when alternative payment methods should be considered. According to a survey by J.P. Morgan, in 2016, 75 percent of organizations that were victims of fraud in 2016 experienced check fraud, an increase of 4 percent over 2015. More alarmingly, 30 percent of check fraud cases occurred in small businesses, and 60 percent of those businesses didn't recover their losses.

Pretend you’re a large corporation with multiple locations spread across the globe. Each location has its own payment software and means of printing checks (including all different types and qualities of paper). In many of these locations, the paper stock being used has no security features, which can lead to “check washing” fraud – a scam that involves erasing check content in order to re-write its payment details (a process made famous by Frank Abagnale Jr. in the 1960s). 

In this scenario, the bank needs to consolidate its payment disbursement with a centralized, single payment platform to eliminate inconsistent check printing behavior. However, for this process to be universally accepted it must solve for all payment preferences. Some vendors prefer a paper check, while others would choose an eCheck, if given the choice. Although digitally disbursing funds helps reduce the potential fraud risk that traditional payments can experience; many organizations are prohibited from offering this method due to a lack of IT resources required for implementation. 

This is where the Deluxe Payment Exchange comes in. Deluxe Payment Exchange helps businesses automate their payment processes with seamless integration to overcome these barriers. This one-of-a-kind technology can create an eCheck in seconds and send it via email to the payee on the same day, attached to the right remittance documentation, and processed internally in far less time than traditional payment. 

By consolidating the payment process and incorporating Print+Mail, (the ability to digitally receive payment information and print and mail a check with associated remittance information) with digital payment offerings, any sized company can meet the customer demand for faster payments while helping limit fraud risk.  As a Trusted Payments and Business Technology™ company and a partner to more than 4,000 financial institutions and 4 million small businesses, Deluxe continues to prioritize innovation and strives to deliver the best solution possible to help our customers pay, get paid, and grow.