How often do you write a paper check? A few times a month? Less? Debit cards, online bill-pay, direct deposit, and electronic checking accounts are making the paper check more and more obsolete. And soon, checks will vanish completely.
In Britain, banks are expected to vote today to eliminate paper checks by 2018. Ireland and some Scandinavian countries have already begun phasing out check payments.
Let’s face it: In today’s digital world, checks are slow, cumbersome, and a liability. (Where else can a thief get all of the information he needs to drain your bank account than from the front of any standard check?)
As the UK vote proves, Banks don’t like checks, either. It costs banks an average of $2 to process every single paper check. Even if that check is for $0.97.
The cost of check clearing is why banks can offer perks like free checking or ATM fee reimbursements if you agree to use direct deposit and bill pay; the bank knows it will save money in check clearing fees. And it’s why free online checking accounts like ING Electric Orange (which don’t offer paper checks) can pay interest.
I can’t predict when banks in the United States may start pushing to get rid of checks entirely, but I would bet that the idea is already on their radar. Until then, banks will continue to incentivize electronic payments so that we grow accustomed to saying goodbye to paper checks.
What do you think? Do you still use checks regularly? What for? Do you think we should get rid of them altogether?