CrossCheck Blog

A recent study by the Federal Consumer Financial Protection Bureau (CFPB) has determined that the issuance of credit cards has declined significantly since the start of the COVID pandemic. According to the study, the success rate of credit card applications dropped from 45 percent in January 2020 – the start of the COVID pandemic – to approximately 30 percent a few months later.

John is a building materials supplier. He has just received a wish list of innovative materials from a general contractor who is building an office and lab for a tech manufacturer. John knows the wish list is expensive but is excited to be part of creating what promises to be a structure that will revolutionize the construction industry and hoist it into tomorrow.

Among the many queries received by the CrossCheck team, “How do I recover an NSF check?” is one of the most frequent. But, before going any further a definition is in order. An NSF check (aka “non-sufficient funds check”) is a term used when the holder of a checking account is overdrawn and there is not enough money in the account to pay the check written against it. As a merchant, this can pose a problem when accepting checks. Attempting to deposit a check without sufficient funds will result in the bank returning it unpaid. Also, returned checks can come with the additional consequence of added bank fees. Whatever the cause, NSF checks will cost your business money. NSF checks can happen for many different reasons, but whatever the cause, NSF checks will cost your business money.

Accepting checks is a preferred payment type for many merchants — especially those selling big-ticket items — and is a reliable tool for increasing sales and widening customer reach. Accepting checks is one thing, but deciding how to accept check payments safely is another. That is why many merchants choose payment solutions like CrossCheck’s Electronic Check Processing to securely accept, process and deposit checks into their business accounts without leaving the office.

“Proper preparation prevents poor performance” is a phrase that I heard over and over while in basic training at Fort Knox, Ky. My drill sergeants always stressed the importance of staying ready so you never need to get ready. This simple phrase got me thinking about how businesses are coping during the pandemic. More importantly, what steps are businesses taking to position for success in a post-COVID environment? I have spoken to GMs, controllers, finance directors, CFOs and CEOs about some of the steps they are taking to navigate these rocky waters. Hopefully, their insights (summarized below) will provide you with inspiration and hope as we begin the second quarter of 2021.

Imagine a world where businesses and consumers could scan checks, upload the images via the web, and quickly determine if the checks are valid. Better yet, imagine if those same stakeholders could continue the process by depositing the checks, all without visiting a bank or leaving their offices. It could be a foolproof system, but on this date, April 1, (aka “April Fool’s Day”), the reality is that free online check verification doesn't exist ― never has and probably never will.

In 1962, ABC broadcasted its first program ever in color. The show was called The Jetsons. As remarkable as that achievement was for the times, the animated sitcom was cancelled after only 24 episodes. In the 1980s, The Jetsons was revived for two short years before being shelved decades ahead of technologies such as digital cameras, cell phones, and virtual auto dealer options. Thankfully through syndication, reruns aired for a generation. Hanna-Barbera Productions cartooned unthinkable technology in each futuristic episode. Below is a short list of “FAR OUT” technology available only to George Jetson (and in the imagination of the writers) a half century ago that actually exists today. And with the recent successful takeoff and landing of an automobile on August 25, 2020 in Japan, the list just got a little longer.

Nearly anyone can inadvertently write one bad check for insufficient funds, but doing it intentionally on a repeat basis constitutes check fraud. Also known as paperhanging, this type of crime is joined by a handful of other check fraud classifications. According to a report by the American Bankers Association (ABA), total check fraud attempts have reached a new all-time high in value: $15.8 billion in 2018 compared to just $8.5 billion in 2016. The ABA continued by saying that the financial loss from successful check fraud attempts rose from $789 million in 2016 to $1.3 billion in 2018. The ABA also said check fraud has been on the rise over the last 30 years due to digital channels. Is there a silver lining to this dark cloud? The answer is that U.S. banks prevent over 90% of check fraud attempts via early detection methods. Article Summary Types of Check Fraud Check Fraud in Relation to the History of Checks What Are the Penalties for Check Fraud? In Closing

When it comes to the question, “Guarantee or Verification?” there is no single right answer. Each merchant has different needs. Both services help businesses increase sales and mitigate risk, but there are fundamental differences. Verification is basically professional advice that works best for some merchants, but they will need to conduct their own collections if a check fails. Others will opt for check guarantee — the assurance that even if the check bounces, the sale will hold, the merchant will get paid, and the consumer will be given another chance to make good. The merchant is free to choose either one, but normally the choice depends on the amount of the check.

If you work in the payments industry, you will regularly hear comments such as, “Checks and cash are going away, and pretty quickly too!” Sometimes we hear random comments such as, “Millennials are not using checks,” because they use smartphones and social media for mobile banking and payments. However, the 2019 Federal Reserve Payments Study shows otherwise. Let’s look at the facts. Yes, there has been a decline in check usage over the last decade, but the value of check payments is still strong. According to the study, the value of check payments decreased four percent a year from 2015 to 2018. The current study shows a year-to-year drop from 18.1 billion items to 17.3 billion items — hardly a dramatic event. By the way, that is billions.