Checks versus digital payments. Which ones do you think are more susceptible to fraud?
If you read one of my recent blogs about checks, you’ll probably know the answer to this question. Because it’s such a hot topic, I wanted to revisit it and explore it further.
While digital payments are paving the way to the future, many businesses still use checks. There are multiple reasons why. One thing motivating businesses not to move away from checks is the fear of fraud. The irony behind this is that “of all the payment methods, checks are the most vulnerable to fraud.” A report shows “that 65% of organizations have experienced check fraud, but only 33% experienced ACH debit fraud.” One of the ways these scammers take advantage of others is by changing the name of the payee on the check.
More fraud protection is just one reason to switch to digital payments.
Another reason some businesses have postponed switching is concerns regarding fees. Some companies are concerned that using digital payments over checks will cost them more. However, checks tend to cost businesses the most, and companies can save money by switching to digital payment solutions. In fact, “according to Federal Reserve data, 48% of businesses expect to lower their overall costs by using and accepting faster or instant digital payments.”
Digital payments improve fraud protection and reduce costs. In addition, they help “businesses to reduce days sales outstanding (DSO) and recognize positive cash flow more quickly. They also improve working capital management through faster access to incoming payments.”
Checks are simply slower than digital payments. Companies often have to wait a few days for the checks to arrive, and checks can get lost in transit. Digital payments make transactions more efficient, increase business cash flow, and boost a company’s financial well-being.
Digital payments also improve transaction experiences for everyone involved: the buyer and the seller. They are not just the way of the future; they are the current preferred method. For a business to stay competitive, it needs to adopt digital payments over written checks.
While it can feel a little overwhelming for businesses to make the move, the transition can go smoothly. Businesses need to choose the right solutions. An expert in the industry can help companies identify ideal solutions and pave the way to better financial health. At Richmond Financial, I can guide businesses to make the right financial decisions. Please get in touch for a consultation.
