Most adults today know what a paper check is, even if they don’t use them a lot. But today’s teenagers might have grown up never really seeing a personal check. They can definitely seem like “slow-motion debit cards”, but that doesn’t mean they don’t still have their uses.
Sure, you can Venmo someone money for drinks or dinner, and that’s well and good. You can even pay for a purchase at the drugstore using your smartphone’s Wallet feature. But there are still times when you’ll need access to paper checks, and so here’s a closer look at those cases.
For making bigger purchases
Picture this scenario: You rent an apartment in a new city. You’re excited to move in and get going, but first, you have to pay things like a pet deposit and moving fees. Those aren’t fun, but they’re a common part of moving.
Since you’re moving near the end of the month, your landlord-to-be also wants you to hand over the next month’s rent when you get the key. You already know there’s an online tenant portal — in fact, you used it to pay part of your security deposit. You can probably pay the rest of it online too, right?
Not necessarily. Many landlords will instead ask that you show up with a cashier’s check on the day you’re scheduled to move in. That may be inconvenient for you, as getting a cashier’s check requires more time and effort than writing a personal check or going online to pay, but it’s not all that uncommon. A 2013 Federal Reserve study found that checks are generally used for bigger purchases like rent. A cashier’s check can’t bounce, which is why they’re often used in real estate.
What about businesses that still prefer personal checks? Unlike debit cards, there’s no transaction fees for either writing or accepting a personal check. Today’s checks also have more security features than they did 10 or 20 years ago. For some merchants, that extra security is worth the additional processing time.
For paying employees and clients
You may not realize it, but you probably also get paid via check. However, the vast majority of employers no longer hand out paper checks. Instead, you probably get an electronic check that posts in your banking account, which you can check using online banking services. You should also get a pay stub, but that’s for your records more than anything.
That doesn’t mean an unlucky payroll employee has to sit in their office every two weeks and write out dozens of payroll checks by hand. Most companies use online check writing services for that now. It’s both quicker and more secure to hand the information off to someone else. Employees and clients both get paid faster that way. If direct deposit isn’t an option for whatever reason, then these companies can also mail out physical checks much more quickly than your business could.
Say your company’s roofing needs work. You need to pay a contractor to install Everlast II™ panels, but this particular roofing contractor doesn’t accept digital payments or credit cards. Instead, you have to write a check for part of the amount before work can begin.
Saying “We don’t do checks” isn’t an option, at least not if you want to get the roof work done without delay. That’s why you need a pre-existing infrastructure that allows you to get the check written and handed over to the contract as soon as possible.
Without a doubt, checks play a different role in society than they did a generation ago. But that doesn’t mean they’re going away anytime soon. They’ve evolved, and you should be prepared to evolve with them, regardless of if you’re writing business checks or personal ones.