In the age of credit cards, mobile payment and e-banking, many business owners wonder whether paying by check still has a place. To help you decide for yourself, we’re sharing some of the risky business with checks as well as a few benefits that may keep you from writing them off altogether.
Con – Risk of “Bad” Payment
Check fraud, bounced checks or stopped payments are just a few of the way’s customers can take advantage of your business through checks. For small business owners with limited resources, tracking down these clients for payment could take months and the absent income could be devastating in the interim. Larger corporations often build a certain amount of expected loss into their budgets for exactly this reason.
Con – Delayed Payment
It’s probably no surprise that paper checks aren’t the quickest form of payment. To receive your money requires a trip to the bank, followed by 2-5 days of check processing depending on the check’s value. This leaves you with not only a slower cash flow, but also a slower response time to payment issues. To put it bluntly, by the time your bank alerts you that a check has bounced, the guilty customer will be long gone.
Pro – Better for B2B
If your business deals heavily in B2B, then accepting checks may be a necessity. Many firms, particularly larger companies, prefer to pay invoices by corporate check and their accountants simply won’t accept another payment option. Chances are if you don’t get a green light from their accounting department, you probably won’t get a green light on the job.
Pro – Lower Processing Fees
Every small business owner knows the cost of doing business when it comes to taking debit/credit cards. Not only will you be paying for the card reader and pin pad needed to process the cards, you’ll be charged processing fees just to receive your payment. Accepting checks keeps 100% of the payment in your pocket without you having to pass the fees on to your customers.
Update the Outdated
For most of our customers, accepting checks is a necessary evil – but it doesn’t have to be. With CONEXT®, you can accept checks while minimizing risk & if the check is good, you’ll receive the funds immediately via a business prepaid card. We don’t charge bounce fees, decline fees, or overcharge. The check industry has been around for 250 years – isn’t it about time someone did something to bring it to the 21st century? Ask us how CONEXT® can benefit your business today, and we’ll get you started.