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How to get clients off the checks bandwagon and on the EFT train

accountants advising client
Gilad Idisis
Published at | Updated:

Old habits die hard, and when it comes to B2B payments, paying by paper checks are the elders of the tribe. But it’s not only an old habit. It’s also an inefficient and expensive one. That’s why it’s in the best interest of your clients and yourself to help them drop worn-out practices in favor of Electronic Funds Transfer payments (“EFTs”). So let’s say you’ve decided to migrate your clients to EFTs. What now?

Here’s the thing, EFTs – be it ACH or wire transfer – are superior to paper checks in every possible aspect: they’re faster, safer, and more cost-effective. And yet, business owners’ inclination to stick to checks instead of EFTs means they have inhibitions and blockers that you can address when encouraging your clients to hop on board the EFT train.

We’ve compiled a short guide on how to transition your clients from traditional payments to EFTs with little-to-no bumps along the way. But before we do, let’s look at the tangible benefits of EFT payments.

What are the key benefits of EFT payments? 

EFT payments have great selling points, especially over checks. Here are some of the main advantages that may interest your clients:

EFTs are cheaper than checks

Certain EFT service providers (like Melio, for example) offer zero fees on ACH transactions, with no subscription or sign-up fees whatsoever. Compare that to the cost of sending checks: between buying business checkbooks, envelopes, and stamps, and the handling overheads, it can go up to $26 per check. The math here pretty much speaks for itself.

EFTs are faster than checks

A check sent with USPS takes, well… let’s just say that it’s called snail mail for a reason. “Splurging” on courier services like FedEx can get your check to its destination faster but it will still take you up to 5 business days.

Contrary to that, all EFT payments are faster:

  • Regular ACH transfers take between 1-3 business days to process.
  • Same-day ACH or wire transfers are processed within the same day.
  • Credit cards and single-use virtual cards are processed almost immediately.

EFTs save time on data entry and minimize bookkeeping errors

If your client does their own bookkeeping, manually feeding check payments can take up quite a bit of their time. However, since EFT payments are made online, the digital payment info can be fed automatically into their accounting software, as long as they’re using the right payment service – meaning, a service that offers automatic sync with the accounting software.

Doing less manual data entry also means the chances of getting a number wrong due to a typo are drastically lower. So it’s a win on all accounts!

EFTs are much safer than checks

Checks are exposed to different types of fraud activities and risks. Since they’re essentially physical slips of paper, they can be misplaced, lost, or stolen. Not only can a check be forged, but checks also have your banking details (like account and routing number) printed on them, which means sensitive information is out there for whoever lays their eyes on it.

And if a check gets into the wrong hands, it can be easily misused. How easily, you ask? In a recent survey by the Association for Financial Professionals, checks won the dubious title of “the payment method most impacted by fraud activity in 2020″, with a whopping 66% of all fraudulent transactions. Now, this  is one contest where it’s not an honor to be nominated… let alone win.

Checks are also highly susceptible to mail theft: USPS mail theft reports soared by 600% between 2017 and 2020, from about 25,000 in 2017 to roughly 177,000 through August 2020. During the pandemic things got even more dire: according to the USPS inspector general, “from March 2020 through February 2021, the Postal Inspection Service received 40,727 mail fraud complaints and 299,020 mail theft complaints

Additionally, researchers at Georgia State University found that mail-related check fraud is rising, with a 300% increase in stolen checks transactions in darknet markets since August 2021.

On the other hand, most EFT transactions are highly regulated, and service providers are obligated to undertake state-of-the-art security measures. Moreover, as opposed to checks, your banking details are safe and secure. As to ACH transactions, NACHA regulates all aspects of the activity and even provides a 60-day grace period for unauthorized transactions.

For a more comprehensive review and comparison of the safety of different payment methods, read this article.

Alrighty, we’ve established that EFTs are better than checks.  But the bigger challenge is  taking this big bag of information and presenting it to your clients, in a way that will sway them to drop the habit of relying on checks, in favor of EFTs. What’s the best approach here? Let’s dive in and take a look.

How to switch clients over to online business payments

Follow these 4 steps to encourage your clients to move to EFTs :

Show them the numbers

Now, when we say “numbers” we don’t mean the general stats. These would probably make your clients politely stifle a yawn. The numbers business owners are actually most interested in are their own. And using their own numbers is an effective way to demonstrate just how much money they can save.

Take the number of checks they send in a given month, and add up the expenses:

  1. Direct costs: buying checkbooks, envelopes, and stamps. You can even go so far as to include printer cartridges if they’re printing the checks.
  2. Mailing costs: depending on the type of service your clients are using, and whether it’s USPS or a private carrier, they also have to spend money to mail the checks.
  3. Back Office work costs: if your clients have someone doing the back office work for them, this person’s salary is money spent on sending checks. But even if your clients are doing the work themselves, labor spent on check busywork is labor not invested in more important aspects of their business.
  4. Error costs: how frequently does a check get lost, arrive late, or can’t get deposited because of an error? How many times did they have to pay late fees because of an overdue payment?

Add all these numbers together. Depending on their payment volume, it’ll probably result in tens or even hundreds of dollars a month. Now, go back to the expense clauses we mentioned above and do the same math for EFTs:

  1. Direct costs: $0. 
  2. Mailing costs: $0.
  3. Backoffice costs: a fraction of the time it takes to handle a check.
  4. Error costs: $0. 

Placing the two sets of numbers side-by-side will tell the entire story for you.

Address their security concerns

Moving from what your clients know as a tried and true (though ineffective) payment system to an entirely different one can raise some concerns for them, and the words “digital” and “online” are often associated with uncertainty and risks. Even if your clients know the security problems with checks, some will still feel comfortable with the “better the devil you know” approach.

That’s why it’s important to convey that no payment system is 100% fraud-proof. The real question is how much power you have to control the chances of encountering a fraud attempt, preventing it, and recovering from it.

With online payments, your clients have the power to reduce the chance of a successful fraud to a minimum, just by adhering to simple precautions like changing passwords, not disclosing their information, and not clicking on suspicious links.

By educating your clients on the possible fraud risks around EFTs and how to prevent them, they will feel safer and more open to the idea of using EFTs.

Introduce the right service provider

The most important part of an effort-free transition to EFT is choosing the right service provider. And the right service is one that delivers a balance between simplicity of use, cost, and advanced features (to those who need them). Let’s take Melio for example:

Melio is simple to set up and start scheduling bills within minutes

It’s a straightforward bill pay service that speaks the language of small-to-medium business owners, who don’t necessarily need all the bells and whistles of AP/AR services designed for larger finance departments.

Melio is cost-free for all basic money transfers

ACH transfers are free of charge, with no sign-up or subscription fees and no limit on the number of user accounts you can add.

Melio provides features to make payments easier and faster

Aside from the primary use for ACH transfer, you and your client can take advantage of other advanced features like:

  • Scheduling batch, partial and recurring payments (free).
  • Sync with leading accounting software (QuickBooks Online, Desktop, FreshBooks, and more) (free).
  • Managing approval workflows (free).
  • Paying with debit/credit card even when vendors don’t accept them (for a fee).

Assist your clients with the onboarding process

As with all big changes, it’s always easier to have someone by your side to guide you through the transition. Your clients will adapt faster and better to working with EFTs, by going through the first steps of the process together with you. For example:

  • Opening their account and adding their banking information.
  • Signing them up for a product demo.
  • Scheduling the first payment and going through the process together.
  • Showing them features and hacks to make it easier for them to use the service and take advantage of its full abilities.
  • Making yourself available for questions during the readjustment period.
  • Checking up on them to make sure they’re on the right track.

Better bill pay makes for happier clients

Though the change itself may be challenging, once your clients finally board the EFT train, it’ll improve every aspect of their business: they’ll save money and gain more time to focus on their success. Ultimately, keeping your clients happy and helping them grow their business is what it’s all about.

If you’re interested in exploring the option of taking payments completely off your clients’ hands while expanding your service offering, check out our article on why you should offer AP/AR services to your clients.

*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.