The Hidden Costs of Cheques For Your Business
Cheques cost more than you think. Processing costs, payment fraud, time delays, delayed funding, and high cheque-cashing costs can turn your financial situation into a nightmare.
Cheque processing is expensive! Cheques cost between $2.00 and $3.85 more to process than electronic payments. PaySavvy determined the total cost of issuing one cheque is $17 when you take into account secondary costs. According to Payments Canada, cheques cost between $15-25 per cheque and can be as high as $50 in some cases. By migrating a portion or all of your cheques to electronic payments, you can reduce or eliminate your cheque printing and mailing costs. Migrating to electronic payment options could save Canadian Businesses approximately 41% in B2B transactions.
Cheque fraud is is a big problem! According to JP Morgan, cheque fraud is the most common type of payment fraud. If a cheque is stolen or lost, it’s gone and difficult to replace because it lacks security features common on prepaid cards. In 2017, 75 percent of the companies who were affected by payments fraud experienced cheque fraud. 29 percent of all Canadian bank fraud is via cheque.
Cheques waste time! In today’s digital age, the act of writing, mailing, and going to the bank to deposit a cheque, then waiting for it to clear, is immense. If time is money, the cost of cheques is astronomical. Electronic payments are much faster. With prepaid cards you can distribute one, or one hundred thousand payments, with the click of a button.
Cheques delay capital movement! Reports show that cheques can account for 25 percent of outgoing payments Businesses must send funds a week in advance before cheques can be processed and printed, making them inefficient. This can lead to your business going over your budget or incurring unintended fees. With electronic payments, the capital goes straight to the source. If you offer secure prepaid cards, businesses can effectively manage their payments quickly and easily,
Cheque cashing costs are high! While Canada is a highly banked population, there are still nearly one billion cheques cashed each year with an average transaction rate of $4,200. Many consumers still use expensive financial services providers such as payday lenders, cheque cashers, and pawn shops to manage their finances. Prepaid is a less expensive and more secure alternative.
Ready to make the switch? Check out our new ebook, “Transitioning to Electronic Payments for Canadian Businesses,” where we #KillTheCheque and show you the benefits of switching from cheques to electronic payments, as well as the Top 5 Benefits of Outsourcing Your B2B Payments.
Comments are closed