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How to remove payments by check?

How to remove payments by check?

Reduce or even eliminate payments by check... You all dream about it! Because if checks are still used, the management of this method of payment becomes a real headache for many merchants.

What are the impacts of the check in your management? Why do your customers pay by check? What alternative solutions can you offer them? All the answers in this article.

Summary
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    The cheque in a few figures


    The check is a scriptural means of payment, which means that it allows for the transfer of funds through the delivery of a payment order. Introduced in France in the 19th century, it was not widely used at first, but developed massively in the 1950s. Since the 1980s, its use has tended to decrease over the years.

    In 2020, checks still represented 5% of cashless transactions, i.e. more than 1,100 million payments for an average amount of €522 1. 

    France is the European country most attached to checks: in Europe, 85% of payments by check are French 1. However, 67% of check users say they are using them less often and 77% think that checks will eventually disappear.2

    1100 million payments by check in France

    The disadvantages of paying by cheque

     

     

    Significant hidden costs

     

    Behind its apparent gratuity, the processing of payments by check generates considerable hidden costs. Cashing a check requires various manual and time-consuming (and therefore costly) operations. You must first receive the check, deposit it at your bank, manually enter the amount in your ERP or billing software, find the corresponding order, track the receipt of funds, notify your teams so that they validate and launch the order once your account is credited... In short, a long process, impacting different teams and with a significant risk of error. If you cash one or two checks per month, this processing is acceptable. But if you receive dozens or hundreds of them, it can quickly turn into a nightmare for your accounting teams.

    Longer order processing time


    How to quickly serve your customers who ask to pay by check?     Impossible to take the risk of sending their order without being sure to be paid. The risk of non-payment is too high, especially in the current economic context where cash management is a major issue for all financial departments.

    The processing time inherent to checks slows down the validation of orders and thus increases the risk of dissatisfaction of your customers who are impatiently waiting for their order. Indeed, delivery time remains one of the main criteria of choice for 38% of French people who buy online. 3

    A high rhigh risk of fraud and non-payment


    The check remains the most defrauded payment method. In 2021, it still represented 37% of fraud in terms of amount. The majority of fraud is the result of check and checkbook theft and forgery.

    Another important point to keep in mind is that the check is a revocable means of payment. Your customers have1 year and 8 days from the date of issue to stop payment. There are certainly solutions to cover the risk of non-payment, but their cost is not negligible and reduces your margins.

    Constraints for your customers


    Payment by check is also     binding for your customers. For payments at the point of sale, it is necessary to have your checkbook with you. For remote payments (e-commerce, telephone sales...), your customers must send their check by mail. On the one hand, this costs them a stamp (1.16€ minimum) but it also increases the processing time of their order and the risk of losing their check.

    Finally, there is another significant risk for payers: in the event of a bad check, they risk a fine and may become bankrupt.

    How to replace cheque payments with instant transfer

    Immediate transfer, the alternative to payment by check

     

    If your customers are asking to pay by check, it's probably because the payment solutions you offer do not meet their needs. In 2015, 47% of French people said they paid by check because the recipient of the payment did not accept the payment method they would have preferred to use 5. The check is therefore an alternative when the bank card is not accepted and the amount of the expense is too high.

     

    Replace the check by the immediate transfer!

     

    You can now reduce or even eliminate payments by check by offering an immediate transfer solution. This new payment method is particularly suitable if you manage a high volume of transactions or if your average basket is important.

    Immediate transfer allows the payer to settle an online transaction through an account-to-account payment. The settlement is instantaneous. This new payment method is the result of the PSD2 and will be will become widespread in the years to come.

    The advantages of the immediate transfer in a few words:

    • An express collection You are credited immediately. This allows you to validate your customers' orders instantly and to be reactive.
    • A secure and fluid payment Your customers identify themselves via a secure banking space on the Internet or from their application
    • An irrevocable payment : once the payment is made, no charge back !
    • Much higher payment limits than those of the bank card
    • A reduced cost compared to bank card commission fees (especially for BtoB payments where commission rates are particularly high)
    Immediate transfer

    Payment by immediate transfer is available whatever your sales channel:

    • For online payments the Checkout solution is the perfect complement to credit card or split payments on your e-commerce sites. The installation is fast. A plug-in is available for the main CMS of the market (Prestashop, Magento...).

    • For offline payments (in a physical store, by phone...): the Request to pay solution allows you to send a payment request by link or by QR Code.

    To learn more about the immediate transfer and to visualize the customer journey, ask us for a demonstration.

    Immediate and deferred payment

     

    Some customers prefer to use checks because the processing time required to cash them gives them a "free" payment period. Some even ask you to cash it at a later date to benefit from a deferred payment.

    Contrary to popular belief, immediate transfer and deferred payment are not incompatible! On the contrary. For your customers who need a delay in payment, you can generate a payment link and specify a due date for your customers to schedule their transfer. 

    To learn more about this option, contact our teams.

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    1/ Banque de France data (2020)
    2/ Oney survey
    3/ "Les Français & le paiement". OpinionWay-ACI Worlwide study (November 2021)
    4/ Banque de France - Observatory of the security of means of payment (2021)
    5/ Survey "The French and means of payment" - CSA (2015)

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