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The Hidden Costs of Cheques For Your Business

Cheques cost more than you think. Processing costs, payment fraud, time delays, delayed funding, and high cheque-cashing costs can turn your financial situation into a nightmare.

 

Cheque Processing

Cheque processing is expensive! Cheques cost between $2.00 and $3.85 more to process than electronic payments. PaySavvy determined the total cost of issuing one cheque is $17 when you take into account secondary costs. According to Payments Canada, cheques cost between $15-25 per cheque and can be as high as $50 in some cases. By migrating a portion or all of your cheques to electronic payments, you can reduce or eliminate your cheque printing and mailing costs. Migrating to electronic payment options could save Canadian Businesses approximately 41% in B2B transactions.

 

Cheque Fraud

Cheque fraud is is a big problem! According to JP Morgan, cheque fraud is the most common type of payment fraud. If a cheque is stolen or lost, it’s gone and difficult to replace because it lacks security features common on prepaid cards. In 2017, 75 percent of the companies who were affected by payments fraud experienced cheque fraud. 29 percent of all Canadian bank fraud is via cheque.

 

Time Delays

Cheques waste time! In today’s digital age, the act of writing, mailing, and going to the bank to deposit a cheque, then waiting for it to clear, is immense. If time is money, the cost of cheques is astronomical. Electronic payments are much faster. With prepaid cards you can distribute one, or one hundred thousand payments, with the click of a button.

 

Delayed Funding

Cheques delay capital movement! Reports show that cheques can account for 25 percent of outgoing payments Businesses must send funds a week in advance before cheques can be processed and printed, making them inefficient. This can lead to your business going over your budget or incurring unintended fees. With electronic payments, the capital goes straight to the source. If you offer secure prepaid cards, businesses can effectively manage their payments quickly and easily,

 

Cashing Costs

Cheque cashing costs are high! While Canada is a highly banked population, there are still nearly one billion cheques cashed each year with an average transaction rate of $4,200. Many consumers still use expensive financial services providers such as payday lenders, cheque cashers, and pawn shops to manage their finances. Prepaid is a less expensive and more secure alternative.

 

 

 

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Comments: (2)

Melvin Haskins
Melvin Haskins - Haston International Limited - 01 March, 2019, 08:39Be the first to give this comment the thumbs up 0 likes

Have not seen in a cheque in our business in the UK in more than 10 years. Electronic payments have been in place for more than 20 years.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 01 March, 2019, 10:48Be the first to give this comment the thumbs up 0 likes

In another post by this same author, I'd inquired if Canada didn't have electronic fund transfer methods like NEFT (India) / FPS (UK). Since I didn't get any reply, I did a quick-and-dirty poll of a few of my contacts in Canada. I heard that they rarely use cheques, instead they use Interac EFT service frequently. A few days later, there was an article on Finextra that confirmed my anecdotal evidence about Interac's popularity in Canada. But all that shouldn't come in the way of shilling products for imaginary pain areas.