Why Paper Checks Aren’t the Safest Option for B2B Payments

When was the last time you saw someone pay for their groceries by check? Let’s be honest—many of us will judge a fellow customer for using paper checks in stores. We’ll wonder how they could possibly find it convenient to carry around their checkbook instead of using a debit or credit card.

There’s no denying that electronic payments are mainstream in the world of consumer purchases. In fact, a GoBanking survey revealed that 38% of Americans NEVER write a paper check. The majority of those that do write checks only do so a few times a year or once a month.

This is not the case with B2B payments, however. Many businesses still prefer using paper checks even though setting up an electronic payment system could benefit their business in many ways.

Not only are there money-saving reasons for switching to an electronic payment system, like cutting down on check-processing costs and postage, but it’s safer, as well. Here are a few reasons why paper checks are not as safe as you may think for your B2B payments.

Your Check Has All of Your Valuable Information

Your account number, business name, and routing number are all a fraudster needs to access the money in your business checking account. Your check also includes the signatures of authorized owners/personnel. And this is all conveniently located on the front of your check.

Unlike a business credit card, which usually comes with fraud protection and is money not yet paid, an unauthorized withdrawal is real money deducted from your business account. While you sort out any potential issues with your bank, it could actually cause your business to lack necessary funds in order to pay your financial obligations.

Checks are Handled by a Number of People

From administrative personnel, to the post office box, and finally to your supplier, paper checks are physically touched by a number of people before reaching their destination. And this doesn’t mean it’s safe once it gets to your supplier.

Even if you do everything in your power to safeguard your checks while they are at your business, check fraud can occur at your supplier’s location. Checks may be handled by a number of staff and could sit on top of desks for days before being cashed. In addition, your check information could be stored in file cabinets for years.

Checks Can Be Easily Duplicated (Although Not Needed)

Checks can be easily duplicated with today’s technology. Armed with your banking information, scammers can easily replicate checks and make them look like the real thing. If a scammer has your account and routing numbers, they can easily use just that to make purchases.

This boils down to one important point—the security features on paper checks that were developed decades ago are becoming irrelevant in today’s world.

Gone are the days where a scammer needed to replicate or alter a paper check in order to steal funds. Authentication, in the form of signatures and check security features that businesses relied on are becoming useless in today’s online world. Even if a scammer can easily duplicate and design a realistic-looking paper check with forged signatures, they don’t need to in order to access your money.

The Old Way of Doing Things is Not the Same

Business owners that have been writing paper checks for decades may not realize that checks are not as safe as they used to be. However, you may think switching to an electronic payment system is costly or time-consuming. With the right technology, this couldn’t be further from the truth.

There are AP Automation solutions available that will work with various accounting software and automate your entire payment process. However, this doesn’t mean that you will lack control over the payment dates. In fact, you can just as easily select the pay dates for each invoice as you would a paper check. In addition, your preferred electronic payment method can be securely saved so that you don’t have to waste time inputting this data for every vendor payment.

Not only will you save money and time from check processing by implementing E-invoicing, you will be able to prevent fraud associated with paper checks, as well.

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