The non-stop drumbeat of devastating headlines has woken up many business owners and executives to the perils of data breaches and theft. As a result, many have carved out large portions of their IT budgets to protect their valuable, mission-critical business data.
And then they get out their checkbooks and pay for these services with a paper check, blissfully handing out (literally) their bank account number, bank routing number and name(s) of authorized signers, and other tidbits of information – for everyone to see. And they continue to accept check payments from customers.
Checks remain a stubbornly common way for businesses to pay one another, with 51% of business-to-business (B2B) payments in the US still made by check, according to the Association for Financial Professionals. This continues despite checks’ many drawbacks:
Paper checks persist for a lot of reasons, including inertia, complex and entrenched reconciliation and approval processes and a fondness for “float” – despite today’s anemic interest rates. Checks’ costs and risk far outweigh any benefits.
It’s Time to Go Electronic
Electronic forms of payment – including eChecks, ACH/debit, and credit cards, are all more secure and efficient than paper checks. Electronic forms of payment benefit from easy automation, so businesses can lower processing costs while increasing control, visibility, and efficiency – and even speed up accounts receivable.
But perhaps most important, electronic forms of payment offer far more protection and risk reduction for businesses and their money. Using credit cards, for example, offers these benefits:
Checks as a payment vehicle are far too risky to continue as the dominant form of B2B payments. Companies getting savvy about cybersecurity, regulatory compliance and the general importance of protecting their business data need to apply that same mindset to payments and ditch the paper checks.