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Why Checks Are Still Useful

A History

Since the 12 th century when the “bill of exchange” was introduced in Florence, Italy, checks have been a secure and convenient method of payment for merchants and traders. In the early 19 th century, the Commercial Bank of Scotland was the first institution to personalize checks with customer names and by the mid-19 th century the Bank of England introduced the first modern checkbook. 1

Modern Times

In the 20 th century, checks became one of the most widely used forms of payment in the United States. It’s estimated that in 2001, 70 billion checks were written in the United States alone. 2 However, with the advent of technology, and the rise of debit and credit card usage, that number has declined in the last decade. Still, with 10% of all US payments still done by checks, it’s clear that the paper bill is an important part of all monetary transactions. 3

Credit Cards Not Accepted Everywhere

Today, studies show that 55% of the 27 million small businesses in the US do not accept credit cards despite its popularity. 4 With the number one reason being processing fees, many merchants are hesitant to deal with the expense of accepting credit cards, but are more than willing to accept checks as there is no “convenience” charge involved.

Convenience of Use

It’s estimated that 20% of American household do not have internet access. 5 Meaning for over 63 million Americans, paying bills or purchasing items online simply isn’t as convenient or as safe to do when compared with writing and mailing a check.

1 . Cheque and Credit Clearing Company. Cheques & Cheque Clearing: The Facts. London: Cheque and Credit Clearing Company, 2012. http://www.chequeandcredit.co.uk/files/candc/press/cheques_the_facts_2012.pdf 2 Organisation for Economic Co-operation and Development, ed. The Future of Money. Paris: OECD, 2002.

http://www.oecd.org/futures/35391062.pdf

3 Pianalto, Sandra. “Collaborating to Improve the US Payments System.” Federal Reserve Bank of Cleveland. 22 Oct. 2012. http://www.clevelandfed.org/for_the_public/news_and_media/speeches/2012/pianalto_20121022.cfm 4 “GoPayment Survey Estimate $100 Billion in Missed Sales for Small Businesses that Deny Plastic.” Intuit. 22 May 2012. http://about.intuit.com/about_intuit/press_room/press_release/articles/2012/GetBusinessGrowing.html 5 “Table 1155. Household Internet Usage In and Outside of the Home by Selected Characteristics: 2010.” US Census Bureau. 2012. https://www.census.gov/compendia/statab/2012/tables/12s1155.pdf

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5 Company Bio: Since 1922, CheckWorks, Inc. has been at the forefront of check technology and innovation. The first direct to consumer check printing company, CheckWorks pioneered the

Avoiding Fraud

Credit card theft is a very real and rampant issue for some internet stores and everyday transactions. From “skimmers” being attached to ATMs, to cyber-attacks on websites, a credit card’s security can be easily breached due to the prevalence of its usage.

On the other hand, a signature and designated payee is required on every check, making fraud more difficult when compared to credit and debit cards. Banks will often look for forged or inconsistent signatures when they process a check and identification is often required to pay with a check in-store. If discrepancies or forgery is suspected, account holders can easily petition their case to their bank.

Regulated Spending

Essentially loans, credit cards are often the root of unregulated spending for millions of Americans. Consumers who can’t pay their monthly balance in full are forced to pay interest. If payments are late or are missed, they run of the risk of having their account sent to a collections agency or go into serious debt.

Meanwhile, checks are directly tied to a person’s bank account. This limits consumers to only use what they have when they purchase an item and keep a physical receipt of all their purchases.

In conclusion, using checks can be beneficial for anyone seeking a reliable and secure form of payment. For more information on checks and their usage, please visit CheckWorks, Inc. at www.checkworks.com.