Posted by Checkbook on Jan 28, 2020
To Avoid Fraud, Avoid the Paper-Trail
Historically, there have only been a handful of topics that have caused a buzz within the business community. Topic du jour is: Paper Checks vs. Digital Checks. Manually writing checks and mailing them across to the recipient has been the age old method of making payments; but the recent surge in Digital Check providers and their widespread acceptance in the otherwise opposed-to-change financial community, stands testament to people’s desire for different payment solutions.
While the answer to whether or not Digital Checks are the way to go is almost always dependent on the individual needs of a business, there is, however, one aspect of Digital Checks that unequivocally makes it superior to Paper Checks - Fraud Prevention and Control.
Every organization that is losing millions of dollars due to fraud understands the need to install foolproof methods of maintaining financial security. By virtue of their nature, Paper Checks are dependent on a paper-trail for record-keeping. A paper-trail not only makes a business susceptible to human error, but is also difficult to store and filter through in times of need. Digital Checks have far surpassed Paper Checks in providing a greater level of security and here's how.
Accurate Timestamps: Timestamps help map the sequence of events. They accord a kind of veracity to information and hence, the more accurate the timestamp, the better. Knowing the order in which occurrences take place is invaluable when money (that sometimes multiple people have access to) is being transferred from one account to another. Archaic techniques of using rubber stamps or manually entering timestamps leave a lot of room for tampering. Electronic timestamps efficiently solve this problem and serve as indisputable evidence in legal proceedings.
24x7 Check Tracking: In sending a Paper Check from an originator to a recipient, the check changes hands many times. This lack of sophistication in the postal mail infrastructure heightens the risk of the check being lost in transit or the check being delivered to the wrong person. Digital Checks do away with the need for manual updating on the whereabouts of a check, thereby making it possible to accurately track every movement of the check. And what’s better is that both parties have online access to the details of these movements at anytime of the day.
Privacy of Account Holder's Information: The very sensitive nature of bank account information makes it imperative to protect it from being easily accessible. Such information, when in the wrong hands, is a big liability for any business. Digital Checks completely solve this problem by using end-to-end encryption of account information. This ensures that neither party in the transaction can access each other’s bank account information. Since the third party that is brokering the deal and providing the Digital Check platform exclusively has access to bank account information on both sides, it is essential for a business to choose the right partner.
Avert Bouncing of Checks: One of the biggest drawbacks of Paper Checks is the possibility of the check bouncing back to the originator due to insufficient funds. A bounced check not only delays payment, but it may also lead to some form of monetary penalty. Paper Checks are not built to prevent such fraud and also take a few business days to detect and report it. Since Digital Checks mandate that funds that are being transferred actually be in the originator’s account before the check is issued, they instantly help ensure that a transaction that is deemed to fail is not initiated.
Digital Checks are solving most if not all of the problems inherent with Paper Checks, all the while keeping the familiarity and user experience of a system that everyone is already familiar with. Checkbook.io is the leading provider of Digital Checks in the US.
About Author: Shreeya Agarwal
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