Shredding Inefficiency: A Blueprint for Eliminating Paper Checks

In the midst of our rapidly advancing digital era, the persistence of paper checks in commercial payments is a glaring testament to outdated financial practices. These checks, with their slow delivery, susceptibility to fraud, environmental harm, high processing costs, and negative impact on payee liquidity, are relics that should have been phased out long ago. Yet they persist, with a staggering 92% of organizations accepting checks for incoming payments and 86% using them for outgoing payments. This is a clear indication that old, inefficient habits die hard. 

Despite advancements in electronic payment systems and the widespread adoption of digital alternatives, checks are still very much around. Check volumes have decreased, but checks constitute 33% of all global commercial payments. The per-item average value of checks has increased steadily for the past 10 years, outpacing inflation, so we can’t conclude that the increase is solely due to more expensive goods and services. Something else is afoot. Over the past year, the Javelin Commercial & Enterprise Payments group has written extensively about the world’s lingering check problem. Rather than further dissecting the issue, this research paper will focus on the solution. It will provide specific recommendations on eradicating paper checks from the commercial payments spectrum, including suggestions on structuring environmental, social, and governance (ESG) initiatives, approaches for effective government policy, and guidance on how large corporates can be change leaders. It will also delve into commercial success stories and provide key cost-benefit analysis components that enterprises should include when building their digital-only initiatives.