Is the Check Really in the Mail?

Doc keeps track of all his vast financial holdings electronically, but every once in a blue moon I still have to get out my checkbook to write out a good old-fashioned check. That's why it interested me greatly to read recently that the Obama administration is moving the government toward an all-electronic funds transfer system – no more written checks. This electronic system, already widely in place at many government agencies, will save millions on postage, processing time, and other expenses.

This all got me to thinking about most businesses today.  I still see a lot of businesses issuing printed checks (for payroll and other purposes) and have followed a number of sophisticated check-writing software programs.

So my question today is, do you still issue printed checks and if so, why? What are the main obstacles to moving toward all electronic fund transfers?

My suspicion is that most of those who still issue printed checks are doing so primarily to one-off customers or suppliers where it isn't worth the effort to collect the information necessary to facilitate electronic funds transfers. Usually this only makes sense when you are repeatedly issuing checks to the same party.

But I wonder if there isn't a trust issue with some businesses still, who don't quite like the idea of all that money changing hands electronically. Ironically, from the studies Doc has read, the likelihood of fraud is much higher with printed checks than with electronic transfers.

Is there a general distrust of financial institutions that makes some people prefer a printed document over an electronic one? In Europe, electronic fund transfers are much more common, but there are also many fewer financial institutions. In the United States, there are over 8,400 FDIC-insured commercial banks. That's a lot of routing numbers to keep track of, and Doc assumes people in this country change banks more frequently than in many other countries, due, in part, to tremendous competition between banks.

Please chime in and let me know if your company has made the big switch to electronic fund transfers or if you're still issuing checks the old fashioned way – off the back end of a printer.