It seems we’re always hearing some pundit or other forecast of the demise of a familiar piece of our lives as a result of a “new technology.” These forecasts are sometimes extremely shortsighted and never come to fruition (think Radio) or so much on target that we wonder why it took us so long to realize the truth (think 8-Track tapes). So how do you know what to believe? Think about it this way: if a new technology is demonstrated to meet current needs better than an old technology, and if it makes business sense for all parties involved, then it has a very good chance of taking hold, and displacing an older way of doing things.
This is the case with paper checks. Paper checks cost money to print, cost time and money for businesses to manually deposit and record, cost time and money for the individual banks that process them, and also generate significant costs for the regional Federal Reserve Banks that serve as a clearinghouse for all checks. Additionally, as occurred on 9/11, an infrastructure interruption can cause delays in processing of hundreds of thousands of checks – impacting billions of dollars of consumer and business transactions. Eliminating the submission of actual paper checks for processing, in favor of ACH and other types of electronic payment processing, not only streamlines processes for businesses, it also saves money for banks and for the Federal Reserve, and has the added bonus of helping the environment by reducing paper use and saving trees. Thus, banks have a financial incentive to eliminate paper checks, and the Federal Reserve System has a financial incentive to eliminating paper checks, and large businesses (particularly those handling large check volumes) have a strong financial incentive to eliminate paper checks – which I believe amounts to an overwhelming market force that will ultimately prevail to eliminate the paper check.
So what happens to small businesses that rely on paper check payments? And what happens to consumers who like receiving copies of their canceled checks? Unfortunately for the latter, they will simply have to adjust. For the former, there is help. Companies like PaySimple are dedicated to helping small businesses not only adjust to technology changes, but also leverage them to streamline processes and enhance revenue. We make the transition easy, and our simple system enables even the novice computer user to easily convert paper checks to electronic transactions and set up other commerce management services that can help eliminate the need for collecting paper checks altogether. So, embrace the disappearance of the paper check, and view it as an opportunity to utilize new cost-saving technologies that will improve your business.