The last few decades has given rise to myriad innovations in banking; from the introduction of the ATM in 1969, to the widespread use of debit and credit cards in the 1990s, banking has gradually moved away from traditional methods of payment like writing paper checks to conducting transactions electronically.
With the advent of electronic bill payments, some have begun to question whether paper checks are still necessary. So, which is safer – paper checks or electronic bill payments?
The answer to this question is not a simple one, as there are pros and cons to both methods of payment. Let’s take a look at some of the key advantages and disadvantages of each:
One of the biggest advantages of using paper checks is that they offer a high level of security. Every check has unique information, such as the account number and routing number, which helps to prevent fraud. In addition, when a check is cashed, the bank has to verify that the funds are available in the account, which helps to protect against overdrafts.
Another advantage of paper checks is that they are widely accepted and don't require internet access. Most businesses and service providers still accept payments by check, which can be helpful when you need to pay a bill but don’t have access to a computer or the internet.
However, there are also a few disadvantages to using paper checks. One of the biggest is that it can take longer for the funds to be transferred from your account to the payee’s account. This is because the check needs to be physically delivered to the payee, and they then need to deposit it into their account. In addition, if the check is lost or stolen, it can be difficult to recover the funds, and credit protection is significantly more difficult to acquire.
That last point is particularly relevant in the current age of identity theft; a paper check can be easily stolen and used to fraudulently withdraw funds from an account.
Electronic Bill Payments
One of the biggest advantages of electronic bill payments is that they are quick and easy to use. With just a few clicks of a mouse, you can send money to any business or individual in the world. In addition, most banks offer online bill pay services, which make it easy to manage all of your bills from one central location.
Another advantage of electronic bill payments is that they are typically more secure than paper checks. Since the transactions are conducted electronically, there is less opportunity for fraud. In addition, many banks offer fraud protection services, which can help to protect you against any unauthorized charges.
However, electronic bill payments do have a few disadvantages. One is that they can be expensive; many banks charge a fee for each transaction. Additionally, if you don’t have internet access, you won’t be able to use this method of payment.
Which is safer – paper checks or electronic bill payments?
It is, of course, up to you to decide which method of payment to use. However, paper checks do offer a high level of security, while electronic bill payments are quick and easy to use. In terms of safety, then, here are some considerations to make:
- Paper checks can be cancelled and stopped if they are lost or stolen, while electronic payments cannot.
- If someone manages to get their hands on your checking account number and routing number, they could potentially steal your money by making electronic payments from your account. However, it is much more difficult to obtain this information and your checkbook at the same time.
- That said, paper checks can be used to pay bills even if the recipient does not have a bank account, while electronic payments cannot - so if your checkbook and banking information is stolen, the recipient does not need a bank account to receive it (making random theft more likely).
- If there is a problem with an electronic payment (e.g., the biller doesn’t receive the payment), it’s easy to get your money back. With a paper check, on the other hand, it’s a little more difficult - you’ll need to physically track it down and try to find out what happened.
So, which is safer – paper checks or electronic bill payments?
In general, paper checks are considered to be more secure than electronic payments.
However, with the increasing use of debit and credit cards for convenience, as well as the development of new technologies like Apple Pay and Android Pay, it is likely that the use of paper checks will continue to decline in the years to come.
If you’re an independent contractor, the same arguments above apply to other physical documents, like your paystubs or invoices. Making your paystubs digitally can help alleviate some of these problems, as well as force any potential thieves to leave more of a digital trace if they choose to take advantage of your data.
Whatever you choose to do, know that we live in an era of increasingly simple identity theft & bank fraud. Take the utmost care & consideration when dealing with your banking information!