The Real Cost Of Cheques To Canadian Businesses
Cheques are expensive, waste time, enable fraudsters, and limit the financial flexibility of its users. It’s time to switch to prepaid.
HIDDEN AND DANGEROUS COSTS OF CHEQUES
Cheque processing is expensive: Cheques cost between $2.00 and $3.85 more to process than electronic payments.
Cheque fraud is a big problem: Cheque fraud is among the oldest and most common forms of financial crime. And if a cheque is stolen or lost, it’s gone and painful to replace because it lacks the security features common on credit, debit and prepaid cards.
Cheques waste time: In today’s digital age, the act of writing, mailing and going to the bank to deposit a cheque, and then waiting for it to clear is akin to waiting for a fax to transmit and print. If time is money, this cost is astronomical. (Also, who wants to carry around a cheque book?)
Cheques delay capital movement: Businesses must send funds a week in advance before cheques can be processed and printed, making them inefficient. With electronic payments, the capital goes straight to the source.
Cheque cashing costs are high: While Canada has a highly banked population, many consumers still use expensive alternative financial services providers such as payday lenders, cheque cashers and pawnshops to manage their finances. Prepaid can serve this population less expensively and more securely.
Cheques Are An Expensive Burden On Your Business
Open-loop prepaid products provide consumers, businesses and governments with the efficiency, security and flexibility of electronic payments by leveraging a payment tool that is nearly universally understood and accepted – the card. Prepaid cards can be used anywhere the card network (i.e. American Express®, Mastercard® or Visa®) is accepted, including online.
As a viable cheque replacement solution, prepaid products are improving financial inclusion for consumers, removing friction and cost from business-to-business payments, and implementing more secure ways to distribute funds where and when people need them.
The previous information has been provided by the Canadian Prepaid Providers Organization (CPPO, a nonprofit organization and the collective voice of the open-loop prepaid payments industry in Canada. For the full report, click here.
Have questions or looking to learn more about prepaid cards? Feel free to contact us by visiting our contact page. DCR offers you years of experience and expertise in prepaid card programs — from the launching stage all the way through fulfillment.