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Check Processing & Payments Information

Are paper checks dead — fact or fiction?

Posted by Karen Boyce | Thu, May 11, 2023 @ 09:30 AM

furniture store

Some people say checks are dead. For those who know better — such as people working in the financial services industry — the trivialization that checks are dead is pure fiction. On the contrary: check writing is still very much alive … and dare we say, quite profitable for merchants.

Millions of dollars in checks are processed daily, contributing to the billions of dollars processed annually. Industries such as auto dealerships, building supply, heavy equipment, home furnishings, non-profits, healthcare, vet clinics and a host of other businesses continue to accept checks.

Of course, this is not the first time we’ve heard people say checks are dead. In fact, we write about this very thing every few years. See “Checks Are Going Away … or Are They?

Acknowledging all of the above, the advantages of accepting checks over other payment types should be entered into the equation by merchants who are considering them for their checkout process.

Convenience and Customer Loyalty

Accepting checks can be a convenient payment option for customers who choose to not carry cash or use credit or debit cards. Those individuals simply prefer writing checks at grocery stores, auto repair shops, medical offices and more locations. The data supports this.

auto dealership showroomAmong the 1,000 people surveyed in the 2023 Best Banks survey by GOBankingRates, 23% said they still write checks at least once a month. And of those people, the largest demographic (28%) is between the ages of 18 to 24. No one saw that coming.

Accepting checks can help build customer loyalty by offering a more personalized payment option. Paying by check may be a more familiar and or comfortable choice for people in your community who may not want to embrace the digital alternatives.

Lower Transaction Fees

Checks stack up well against credit cards. Here’s why.

Merchants typically pay the card brands between 1 – 4 percent to process credit card payments. This is a huge burden for businesses that operate on a one or two percent net margin ­– gas stations, grocery stores, and new car dealers ­– to name a few.

On the other hand, check processing fees are significantly less than credit card transaction fees. More importantly, merchants never have to worry about the loss of a returned item because the check is guaranteed by CrossCheck.

Increased Sales

bath, stone and tile storeAccepting checks can help increase sales because it provides customers with alternate payment options. This is especially relevant to merchants using CrossCheck’s popular Multiple Check premium.

Multiple Check is a win-win for merchants and consumers. Here’s an example of how it works.

A Consumer writes 2 to 4 checks to cover the cost of one big-ticket item (e.g. a living room furniture set). All of the checks bear the same date, which is typically the day of the transaction. Next, they tell the merchant when they would like each check deposited over a 30-day period (longer terms are sometimes available). Most buyers choose to have the checks deposited on upcoming paydays so they can replenish their checking accounts.

Here’s the beauty of the entire process. Multiple Check is not financing, so merchants do not need to run credit checks on customers before accepting a check. More importantly, though, merchants receive guaranteed funding from CrossCheck as each check is deposited into their business accounts. Download our free guide to learn how Multiple Check can help increase sales at your business.

Multiple Check Insider's Guide

Topics: Multiple Check

Written by Karen Boyce