Are Paper Checks Still Relevant?

With the rise of debit cards, paper checks can seem slow and outdated. After all, checks work much like a debit card, allowing the recipient to redeem the check for the stated amount, although the actual transfer of funds can take longer. While there is an argument that paper checks are no longer relevant or useful, they are still in use, primarily by adults over the age of 55, with checks accounting for 15 percent of all non-cash payments in one of the latest studies reported by the Federal Reserve. Checks are still heavily used for large money transactions, such as payroll and rent.

Here's a brief look at the benefits and drawbacks of paper checks and why they still have a place in today's online-dominated marketplace.

Pros of Paper Checks

No payment solution is best for every situation. For example, debit and credit cards, while convenient, can come with a higher risk of identity theft and higher costs for merchants. The following are the most important benefits that paper checks can offer.

  • Many small businesses do not accept cards. Credit card processing can be expensive and not every business can afford this cost. Forbes reports that 55 percent of the 27 million small businesses in the U.S. do not accept credit cards. That is especially true with micro-merchants, such as landscapers and pool cleaners, who do not have the volume to justify payment processing costs. With some bills such as rent to a landlord, a check is the only way to make a payment.
  • Easy person-to-person payments. There are now many ways to send money to a private individual, such as Square and PayPal. Despite their convenience, there is not a single payment option that dominates the others. A personal check offers a convenient and accessible way to pay a private individual who does not need to do anything special to receive the money.
  • Check use creates a paper trail. When you use a check, it automatically creates a paper trail that documents when proof of payment was received. Checks are the best way to prove that a lender, creditor, or government agency received payment.
  • Checks can be post-dated. A check works like a contract, stating that the person the check is written out to is to be paid the specified amount on the date noted on the check. Post-dating a check can work for both parties. The person who writes the check knows it cannot be cashed before a specific date.
  • Payment can be stopped. While some banks charge a fee of up to $35, you can stop payment on a check. That is not an option with other payment methods.

Cons of Paper Checks

There are many reasons that paper checks remain relevant, but they are not without drawbacks.

  • Overdraft potential. One of the primary disadvantages is it can be easy to overdraft an account without careful balancing of your checkbook. If you bounce a check, you can face a fee from your bank as well as the check recipient.
  • Merchants do not always take checks. It can be harder to find merchants who are willing to accept checks today, especially out-of-state checks or checks from unfamiliar banks. Merchants also face risks by accepting checks. It may be days before the merchant is alerted that the check was fraudulent or that the check was rejected due to insufficient funds.
  • Security concerns with some checks. There can also be security issues with personal checks. When you give someone a check, you are providing them with your account number, name, and contact information on the check. A check payment can also be used to begin electronic debits which give the merchant greater access to the payee's bank account to make unauthorized but legal debits.


The days of paper checks dominating the payment landscape are gone, but paper checks are still relevant. Check payments offer benefits not available with other payment options, including the ability to post-date a payment, stop a payment, and create an easily traced paper trail for recordkeeping.

Information presented in the Northwest Financial Wellness Center is provided for educational purposes only and is not related to actual Northwest products or services. Northwest makes no representations as to the accuracy, completeness or specific suitability of any information presented. Information provided should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. Northwest recommends you consult a professional for any specific guidance you are seeking.