7 Reasons Nobody Writes Checks Anymore

7 Reasons Nobody Writes Checks Anymore

Andrew Lisa   Thu, March 23, 2023

A check is written, signed and dated instructions for a bank to transfer funds. To mail one, you have to wrap that piece of paper in a second piece of paper and then stick a third piece of paper on the outside to prove you paid to have it travel to its destination on at least one gas-burning vehicle.  If that sounds like a primitive way to move money, you’re in good company.

According to a GOBankingRates survey of 1,000 American adults, 45% haven’t written a single check in the last year — another 12% wrote fewer than six.

It’s nothing new — the writing was on the wall for checks long before COVID forced a shift from in-person to app-based banking. Like manual transmissions and fax machines, paper checks aren’t quite gone yet, but the museum has a spot all picked out. Here’s why.

The Paper Check Is a Victim of History

In 2012, the Federal Reserve Bank of Philadelphia predicted paper checks would be extinct by 2026 — but according to Business Insider, the clock had been ticking since 9/11.

Until that day, physical checks worth billions of dollars were packed onto trucks, shipped to sorting facilities and then loaded onto airplanes every single day. When the FAA grounded all flights on Sept. 11, 2001, the Check 21 Act allowed banks to verify funds with images of checks instead of physical paper.

There was no turning back.

More than a decade later at the time of the Philadelphia Fed report, nearly all bank-to-bank transactions were settled electronically. According to the Atlanta Fed, the number of consumer checks declined by 63% between 2000 and 2015.

Electronic Transfers Are Cheaper and Easier for Banks and Their Customers

At the time of the Philadelphia Fed report, the shift away from physical checks was already saving the banking industry $1.2 billion annually. Faster processing was saving consumers and businesses $2 billion a year.

That was more than a decade ago and the trend continues today.

The 2022 Payments Cost Benchmarking Survey from the Association of Financial Professionals (AFP) showed that the ongoing shift from checks to ACH transfers saves money, lowers fees, reduces fraud and saves time.

When It Comes to Security, Tech Beats Checks

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