As an independent treasury strategist, I’ve worked with many businesses that are reluctant to embrace digital payment processing tools because they are worried about getting hacked or falling victim to digital fraud. So, they continue to rely on paper processing methods like checks because they believe they are safer and easier to control. But the truth is check fraud does happen, and it’s increasing in the business world.
Research from PYMNTS Intelligence shows that 21% of B2B transactions still involve paper checks. Notably, checks are still used 21% of the time in real estate transactions, and in the construction sector, they are still used 76% of the time for subcontractor payments. According to a survey from the Association for Finance Professionals, 75% of respondents admit they still use paper checks in their organizations. Despite the ongoing popularity of paper checks, check fraud is increasing. Criminals have found several ways to circumvent safeguards to prevent check fraud. According to the Financial Criminal Enforcement Network (FinCEN), suspicious activity relating to check fraud at depository institutions tripled between 2018 and 2022, an increase of 201.2%.
So, what can you do to prevent check fraud in your organization? Embrace digital payment processing tools. Despite what you may think, new digital tools have significant safeguards to protect your business from fraud, especially compared to paper checks. For example, 63% of companies have been victims of check fraud in the past year. However, only 30% have experienced ACH fraud. That’s half as much, and unlike check fraud, it is far easier to update ACH transfer payment methods with additional security tools to reduce fraud. These tools can have heightened security measures and advanced tracking that allow your organization to see where your money is going, who it was sent by, and when someone received it. Digital payment tools like ACH transfers, e-checks, and mobile banking have robust security features that you can update and watch more carefully than a paper check in the mail.
The days of sending out paper checks are over. You must embrace new payment processing tools to take your business into the digital age. I can help. As an independent treasury strategist, I can work with your organization to develop a modern payment processing system that utilizes safer and more secure digital tools. This new system will be more protected against fraud attempts and make it easier for your business to process payments faster and see precisely where your money is going. Book a consultation call with me today if you’re ready to embrace a digital payment processing strategy.
