There is no shortage in ways to pay someone for a service today from, online transfers, card payments, cold hard cash, and cryptocurrencies. You can even use your own phone for quick, easy payments and transfers. So with all of these high tech ways of sending your money to someone else, why are we still using cheques?
In the past, cheques were an intuitive alternative to cash. If you wanted to pay someone a large amount of money, why carry all that cash when I can achieve the same result with a piece of paper? This is also the logic of the meteoric rise of card payments in the last few years.
What are the advantages of using cheques?
- The main advantage of cheques is that most cards (especially credit cards) have charges. This means that if I pay someone €10, they might actually only receive €9.90. With a cheque, I am telling my bank to transfer €10 to the person’s account, meaning they will receive the full amount of €10.
- You can post date your cheques to be cashed in later if you do not have the funds in your account at the time.
- It is very common for businesses to pay via corporate cheques.
What are the drawbacks of using cheques?
- The obvious one; It takes a few days for a cheque to be processed. This means that if the cheque will bounce, or worse, is fraudulent, it will take a few days for the bank to notify you.
- Using a cheque in a foreign country does not have the same mileage as cards. If your card is Visa or Mastercard, you are practically guaranteed to be accepted in a foreign store. Cheques do not share this same peace of mind.
- Cheques are terrible for small amounts. I’ve seen cheques for transactions worth less than €5. It was probably more expensive to produce the cheque than the transaction was worth.
- Cheques are worse for the environment than other forms of payment. After a cheque is processed, it is shredded by the bank.
- Finally, a number of stores do not accept cheques because of these risks. Most companies will not risk a client walking out the door with a product, potentially worth a lot of money, and not having paid for it.
After all, it’s 2018. Cryptocurrencies and contactless payments are booming. WHY are we still using cheques?!
Do you think it’s time to ditch the cheques? Tell us what you think in the comments below.