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Why are US small businesses still paying with paper checks in 2019?

Why is the US at least a decade behind Europe when it comes to writing checks?

This may have made sense 50 years ago when it was more efficient to write on a piece of paper than carry a suitcase of notes. But to maintain this method in 2019 when there are well-accepted forms of digital payment, seems to make less sense.  

Let’s take a look at Europe. Finland stopped writing checks in 1993, followed by The Netherlands in 2002 and Poland in 2006. Last year Denmark abolished this archaic payment habit and Germany, Belgium and Switzerland have followed suit. There’s still consumer resistance in the UK, but it’s genuinely on the decline.

Only the US is stuck in history. It hasn’t helped that the Feds lack authority to recreate the U.S. payment system. Nor has its fragmented banking system helped matters.

Even with cheaper payment solutions like ACH (Automated Clearing House) or P2P on the market, 97% of businesses in the US and 51% of total payments between businesses are still made with checks.

Attempts are being made in the US to modernize the system but not fast enough. Businesses know the check system works and they feel comfortable with it, but it comes at a price.

According to research by the Bank of America, the aggregate cost of a check is between $4 to $20, based on the price of the actual check and shipping, plus the time spent writing, mailing, collecting and its reconciliation. The Aberdeen Group reported an average cost of $7.78 per check and a survey carried out by Bottomline revealed the cost of processing a check costs businesses ten times more than an ACH transfer.

With the increase of online payment systems now available on the market, it appears this “comfort” needs to be revisited.

So why are American small businesses still wasting their hard earned time and money on this ancient payment method?

Check paying does have some advantages. Businesses know the check system works and they feel comfortable with it. There’s also a good old verifiable audit trail that doesn’t require new processes to be put in place. Check writing also gives businesses the illusion of more control over their cash flow.

From our anecdotal research, we saw old habits die hard with those who plainly said, “it works, why break something that isn’t entirely broken?” Or perhaps the most reasonable excuse to continue with this brain-numbing act, “grandma helps out with the bill paying and we want her to feel useful”.

The payments industry faces a rapidly changing environment and for good reason. With the death of check writing, the Europeans are no longer vulnerable to fraud which is higher with checks than any other payment method. Today there are better, faster, less costly payment methodologies in place that also include instant reconciliation.

At Melio, we are working hard to address all the needs of small businesses by providing low cost, easy tools that will help transition businesses smoothly from check writing to digital payments. For more information, please visit us at

*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.