After high school, I went to work before going to college. My first full-time job began in 1974 with the Federal Reserve Bank in Jacksonville, a branch of the Atlanta Fed. After working for a year as a cash teller (shipping and receiving hundreds of millions of dollars to/from member banks), I decided to go to college. I accepted a job at the Fed on the night shift and attended college during the day.
The Fed processed cash during the day. Checks were processed all day and all night. The night shift focused on moving checks between banks all over the country. Checks exploded as the payment method of choice in the 1970’s. As someone who has been involved with check processing since 1975, I can say with confidence that their days as a meaningful form of business payment will rapidly decline. The latest developments in digital payments, combined with the continuing proliferation of debit cards, are hastening the demise of commercial paper checks.
Checks have morphed into the most expensive form of payment a business commonly uses to make payments. As the growing number of unbanked and underbanked folks know, transacting a check has become time consuming and expensive. Prepaid debit cards work for the underbanked much more effectively and efficiently than checks.
While consumers have embraced many new digital payment options, medium to large businesses continue to rely on checks and direct deposits to send money to their customers and vendors. Their long-term reliance on the two oldest forms of payment is changing. Fintech companies and banks are building faster, better, more efficient payment options for businesses to disburse funds. New digital payment options reduce internal operating costs while improving payee satisfaction. New disbursement solutions are now too effective as check replacements for businesses to ignore.
CAPE offers five disbursement options for payees to select: direct deposits, instant Visa Direct payments, plastic Visa prepaid debit cards, virtual Visa prepaid debit cards and checks. Payees choose their preferred payment option via email.
Businesses and government agencies provide their payment files to us and we handle their disbursements for them. Internal savings per check replaced exceed $7 per payment. Payees choose their preferred payment option and businesses improve internal operations and meaningfully reduce internal operating costs.