Why Paper Checks Refuse to Die

It’s hard to avoid hassle — or fraud — when you’re required to pay with paper and ink. Here’s why checks persist and why some people don’t mind.

By Ron Lieber

July 24, 2024

Target stopped accepting personal checks as a form of payment this month, which might inspire the following question: What took so long?

Check fraud has more than doubled in recent years, and it costs at least a dollar for businesses to process each check they receive. Plenty of young adults have never even written one.

But if you haven’t used a check in years and consider it a badge of honor, that may say a lot about where you live and what you pay for. In many industries, checks continue to be a popular form of payment, and sometimes they are required.

According to consumer survey data from the Federal Reserve Bank of Atlanta, which tracks the percentage of payments that consumers make by check, the following industries receive the most check payments: Contractors, like electricians and plumbers, get 25 percent of their payments by check. Charitable and religious organizations are next at 22 percent. Landlords, government taxing authorities and professional-service firms also receive double-digit percentages of their payments by check.

There are many pockets of commerce in which checks are required. Readers of Your Money newsletter wrote in to complain about having to write checks for a number of things, like homeowners’ association dues and haircuts, along with dog shows and the occasional long-term care insurance policy.

Some people actually like it this way, though they cite many different reasons. Feelings play a role, as do fees. Fear does, too.

In short, it’s complicated, so we won’t be rid of checks anytime soon. Here are some of the main reasons.

Handshake (or a Hug)

“Checks are really a fundamental cultural signifier of relationship-based commerce,” said Scott Anchin, the vice president of senior operational risk and payments policy for the Independent Community Bankers of America, which wants to reduce the number of check payments. “It’s almost like a handshake.”

Consider a collection plate at church. Sure, you could fill out a slip to pay by credit card. But there’s a ritual associated with writing a check in the moment. “I want to feel the act of giving,” said Anne Thomas, 65, who lives in State College, Pa., and works and volunteers in churches.

Then there are gifts. Sending money on a digital payment platform like Venmo feels like the opposite of an embrace, even if it includes emojis, and gift cards can be a pain to use. If you’re sending a card through the mail with a monetary gift, a check may feel like the best option.

Fear

For every person who has been a victim of check fraud, there is another who runs into crooks online.

Just one brush with a bad actor on Venmo or similar payment services like PayPal or Zelle — and any resulting struggle to get the money back — can be enough to push people back to paper. And given the high volume of security breaches, plenty of people avoid storing their bank account information on some random website just to make it easier to pay fees a few times each year.

If you’re new to online payments, the fear of adding an errant zero or missing a payment because of a misplaced click might outweigh the hassle and fraud risk associated with checks.

Simplicity

This is where those pesky homeowners’ association dues come in. Imagine that your HOA is self-managed. Now imagine that you drew the short straw and are the treasurer this year.

You have a full-time job and family and friends that you like seeing. Then there are hobbies, and none of those hobbies include dorking out about electronic payment systems at the one local bank that is willing to host your HOA’s account without charging you fees, or researching other options.

There are just 10 homeowners in your hypothetical HOA, after all. And so it is more simple if people pay by check.

The 3 Percent Standoff

Rebecca Symmes, 71, just moved to Delaplane, Va., with her eye on retirement and fixing up her land. For this, she needed mowers, tractors, wood chippers and other gear.

Local vendors were fine with her using a credit card, which would have given her airline miles, but they wanted to charge a fee. “The fees ended up amounting to almost as much as an airline ticket,” she said. Instead, she wrote checks, because they cost nothing.

“What many credit-card and debit-card users don’t realize is that the vendor is paying for their travel rewards points and cash back through the fees charged by the processing companies,” said Laura Bair, 61, a hairdresser in Santa Fe, N.M.

After a particularly bad run-in with one of the processors, Ms. Bair went cold turkey on plastic. Now, she takes only cash or checks.

The $1.50 Nudge

In Queen Anne’s County in Maryland, the service charge for processing a credit-card payment is a 2.95 percent flat fee. If you want to use what the county calls E-checks to pay directly from your bank account, it costs $1.50.

But paying by a traditional check is free, minus the postage stamp and whatever value you assign to the time required to find your checkbook and an envelope.

What gives with the surcharge for helping billers avoid paper checks or credit-card fees? Michael A. McCreary, the director and operations manager for Atlanta at Pure Property Management, blames financial service providers for hiking the fees they charge firms like his. But he also understands why they charge those fees, and his residents pay $2.95 to make electronic payments directly from their bank accounts.

“While a great deal can be governed through software, there have to be human beings involved, so that’s an expense on both ends,” he said.

Leverage (and Who Has It)

If you’ve got money to give, you call the shots, so charities and religious congregations don’t want to tell you how to give, if they can help it.

“We’re never going to shut people down like they are doing at Target,” said Rick Cohen, the chief communications and chief operating officer at the National Council of Nonprofits. “The cost of processing and depositing the check is lower than the cost of not getting the donation at all.”

Contractors may be set in their ways. If you’ve been laying electrical wire as a solo practitioner for 30 years, and checks work fine, why would you need to fuss with Venmo? And when plumbers show up to fix your clogged toilet in your one-and-only-bathroom apartment, they call the shots, not you.

Then, consider gardeners like the one Paul Buckley employs.

Mr. Buckley, 58, lives on five unruly acres in Bucks County, Pa., and a gardener helps tame the land a few hours each week. She does not know of Venmo or Zelle, nor does she want to, Mr. Buckley told me via email.

She used to only accept cash, which meant a drive to the bank for anyone wanting to pay her. So when she “finally said ‘OK, I’ll accept checks,’ it was like ‘Hallelujah!’”