The introduction of online banking has greatly simplified a lot of our banking chores. Paying bills or sending money has never been so easy. This begs the question about the relevancy of paper checks. Why are people still using checks?
Well, checks may not be able to match the swiftness and convenience of internet banking; it does however come with its own set of advantages. Facilities such as depositing checks online by snapping its picture show that banks are making an effort to integrate them with modern technology. Compatible with the latest accountancy software packages, computer checks have also gained in popularity. They allow companies to issue a huge number of checks without losing track.
Long story short, checks are not going away anytime soon and here’re 5 reasons why.
1. Allows Postponement of Withdrawals.
When you pay someone online the money is immediately withdrawn from your account and credited to theirs. This is great if you have money. Checks, on the other hand, take a few days to cash, which buys you valuable time to acquire the necessary funds. This is not a practice that’s advisable and should only be done if you are 100 percent certain of money coming in to cover the issued check. Businesses do this all the time. They often write post-dated checks to their vendors. This gives the vendors the assurance of payment without immediately emptying out the cash reserves of the business owner.
2. Check Cancelling Facility.
Payment methods such as online transfers and money orders are irreversible. This means, there is no way to stop the payment once it is processed. With checks, all you need to do is contact the bank and ask them to stop the payment. There can be a number of reasons why you would want to stop a payment. Consider this scenario. You issue a business checks for a particular raw material to make a certain product. Once the raw material arrives, you discover that it fails the quality test. In this case, you can ask the vendor to take back the delivered goods and cancel the payment by stopping the check.
3. Paying People with No Bank Accounts.
Another great advantage of having a checkbook around is that it allows you to pay people who do not have an account in the bank. Even if the recipient has an account, it’s always easier to write a check than going through the lengthy process of registering their accounts online before money can be transferred.
4. Better Recordkeeping.
Any checks you issue goes in the permanent records of your bank account. Banks nowadays even allow you to view and download the images of checks you have issued in the past. This proof of payment comes in handy at times of legal disputes. Simply put, a check is a legal proof that you made a particular payment at a particular date to a particular person.
5. Some People Prefer Check Payments.
Like it or not, there are people who are still not comfortable with online banking. A huge chunk of the elderly population prefers to do banking the old fashioned way. Checks give them that sense of familiarity and assurance.