To paraphrase Mark Twain, rumours of the death of paper cheques may have been greatly exaggerated — at least in the past. For years, debates have raged within the payments community over the remaining lifespan for paper cheques. This method of payment has been around for hundreds of years, but advances and adoption of electronic payment alternatives may finally signal an end to the physical promissory note.
The case to eradicate cheques revolves around their inherent insecurity, inefficiency, and the amount of time it takes to process this form of payment. All of these friction points ultimately add up to increased costs. Organisations appear to be reducing their use of cheques, however. A 2016 survey from The Association of Financial Professionals found that 44 percent of businesses say they receive payment via cheque, which is down from 50 percent in 2013.
One of the biggest challenges in adopting a paperless payment standard, however, is the sheer number of associated B2B systems that would also have to go fully digital — including invoicing, reconciliation, accounting, and other facets of corporate finance. To address this issue, it’s important that service providers like Tungsten Network work closely with buyers, suppliers and supply chain stakeholders to digitise those complementary invoicing and payment systems.