It seems like I hardly ever reach for my checkbook anymore. In fact have you noticed that almost no one uses a checkbook at a cash register? However, in the B2B world, a whole lot of checks are still being used. Even in consumer land, when you use your online banking platform with your financial institution, checks are being cut behind the scenes – so while you don’t reach for your checkbook, a check is being used to make your payment (in many cases).
Why is check writing so prevalent between businesses? There are many factors, but one is convenience. A payor does not have to obtain your banking information – no routing and transit numbers or account numbers. No need to keep this info secure either. There is also less concern about corporate account takeover – however, mail fraud is a risk when dealing with paper checks (in fact I was a victim – see blogpost ) going through the postal process.
Businesses have to deal with invoicing and remittance as well. They need to know why they are paying people and what they are collecting payment for. That means paper invoices must be married to the accounting software entries. Now there is a way to take advantage of the efficiency of the check payment system over the internet – VerifyValid enables businesses to pay each other via checks on the internet.
Paul Doyle, CEO of VerifyValid was interviewed by Paul Gillin just before the Money2020 conference in which he was a panelist. The session was called Tomorrow’s Bank. Check out this interview where he contends that check volume will not decrease, but will in fact increase in the coming years.