The Move to Digital Payment: When the Check Is No Longer in the Mail

Contents:

  • The Globe and Mail
  • Most Popular Articles
  • How to define digital payments?
  • Is the cheque disappearing any time soon?

    • Some other countries charge consumers for cheque use, leading to a sharp drop in usage. Another obstacle is habit. Gaetz, adding that for small businesses, writing cheques also doubles as a convenient and rudimentary way to do record keeping via the cheque stubs.

    Smartbox by Inbox: the mailbox of tomorrow, today

    While he says that the conversation surrounding the elimination of cheques reminds him of those that were had leading up to the elimination of the penny in this country, Mr. Gaetz is adamant that the time has come to move forward. However, there are reasons people and organizations continue to use cheques.

    The Globe and Mail

    A key first step is understanding which instruments are even available, and on what basis, in your country and how they can be grouped according to their nature. Simply issuing and depositing checks cost U. In an increasing numbers of countries, paper checks are truncated into an digital message on deposit, and since they require the payer to have an account, and are also traceable, they are less like cash in these attributes and more like account-based digital options. Connect with us Twitter LinkedIn Facebook. That's more than four times as many checks as were written that year in the European Union's 28 member countries, according to the European Central Bank. To be considered digital, both require that at least one party, whether the payer or the payee in the payment transaction, uses a digital medium to authorize or receive payment. Back to top How to define digital payments — step 1 The nature of the payment instrument A key first step is understanding which instruments are even available, and on what basis, in your country and how they can be grouped according to their nature.

    In defence of the cheque, Ms. Hutchison reasons that unlike other payment forms, such as credit cards or e-mail money transfers, it is well suited for exchanging large amounts of money. Another factor that favours the cheque is that one doesn't need to know any of the receiver's bank details to complete the transaction, with just the name sufficing.

    And, as many parents can no doubt relate, just try paying for a child's school activities, among other things, electronically. This situation may be one that changes in the near future. According to Louis Georgakakis, marketing director for Pivotal Payments in Montreal, technology is providing us with more options online. Those will only become more ubiquitous with the Canadian adoption of payment platforms such as Apple Pay, a smartphone-paying platform which recently signed on with Canada's big five banks.

    However, he says "this mindset is also changing with alternative payment methods such as peer-to-peer payments and mobile wallets becoming mainstream. The ability to deposit cheques by snapping a picture of them on a smartphone has made the process more convenient, though. Hutchison acknowledges, that technology has seen cheques advertised for the first time in many years in North America and it has "probably extended the life of cheque as a payment type in Canada because we've made it easy to deposit and maybe a little bit cool.

    • Orphan Star (Adventures of Pip & Flinx)!
    • Carmella Jackson: Manifest Vampire, Kindle Edition.
    • How to define digital payments?.
    • Enslaved By Blood.

    This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe. If you would like to write a letter to the editor, please forward it to letters globeandmail. Readers can also interact with The Globe on Facebook and Twitter. Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

    Read our community guidelines here. African and Mideast Business. ETFs Up and Down. Letters to the Editor. The Real Estate Market. Quick links Horoscopes Puzzles Customer service My account. Article text size A.

    Most Popular Articles

    Open this photo in gallery: A growing number of consumers don't hesitate to buy a cup of coffee using an iPhone, bid for a dress on eBay and pay for it via PayPal, or purchase a sofa on OverStock. But for American businesses, the old-fashioned paper check remains the preferred payment method.

    How to define digital payments?

    Electronic checks move money from one checking account to Share; Flip; Pin; Email you write a check by hand, the check can be converted to an electronic payment at the way and not even know that it gets converted into an electronic check. . Lifewire · ThoughtCo · TripSavvy · The Spruce; and more. Cutting a check is. 10 times more costly to companies than making electronic payments. percent) using electronic payments. Paper checks are not only old- fashioned, . The average cost of a manual payment—mailing a check out—is about.

    Businesses in the U. It's been around for a long time, and they feel very comfortable with it," said Magnus Carlsson, a manager at the trade group. That comfort comes at a price.

    Is the cheque disappearing any time soon?

    And while it's easy to drop a check in the mail, checks are a burden on the economy. Simply issuing and depositing checks cost U. American businesses and consumers wrote 21 billion checks in , according to the Federal Reserve. That's more than four times as many checks as were written that year in the European Union's 28 member countries, according to the European Central Bank. WSJD is the Journal's home for tech news, analysis and product reviews.

    Most Popular Videos

    E-payments "give us better controls, visibility and predictability in cash management," said GM Treasurer Jim Davlin. He wouldn't say how much more paper checks cost GM. Checks are the only form of payment easily accessible to all of Goodyear's business partners, said Keith Price, a company spokesman. For some companies, the inefficiencies of sending checks through the mail have financial advantages.

    Although interest rates are negligible now, any boost in the future will only increase the advantage of that strategy, he added. Checks also remain popular with U. They became ubiquitous in the early 20th century. A relatively efficient postal system carried them across the country in just a few days, and the Fed's centralized check-clearing system allowed the money to move easily between accounts across a patchwork of thousands of banks.

    Even today, checks can make life easier for corporate treasurers because they contain more information than many e-payments, allowing businesses to quickly match payments and invoices.

    E-payments, such as wire transfers or payments through automated clearing houses, don't always include invoice details. Companies can hire banks to do the matching for them, or invest in expensive software and back-end systems to reconcile the payments. In September, the Fed asked for public comments on ways to encourage e-payments.