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Check usage is definitely on a downwards trend here in the US too, but there are very important benefits to using them and I doubt they will ever become truly o

Check usage is definitely on a downwards trend here in the US too, but there are very important benefits to using them and I doubt they will ever become truly obsolete. As for the benefits I just alluded to, they are in no particular order: * Simplicity and security. You cut someone a check, it's effectively the same as handing someone a wad of cash but without the logistical, security, and social issues associated with handling wads of cash. * Convenience. Checks are easy to use and require nothing other than a pen compared to other forms of transferring money, such as wire transfers or debit cards. * Assurance. Cashier's checks are a special kind of check guaranteed by the underwriting bank. These are often used when large sums of money need to exchange hands with no hassle or problems (eg: real estate or vehicle purchases).

lotsofpulp 3y ago
The benefits of your first two points are even greater with electronic mechanisms of transferring money. And a big downside of checks is that it reveals your bank account and routing # in an ACH system where money can be “pulled” anytime from your account. Compare to an electronic money transfer system where money is pushed from entity to entity using a unique identifier, but can’t be “pulled”.
patio11 3y ago
Checks also let you do fairly complex multiparty commerce without needing to spend millions of dollars engineering it, like an apartment broker requiring you to give them a check for deposit/first month’s rent and signed lease prior to releasing the keys to you. Note that the check is to the landlord and the broker cannot access her accounts, but visual inspection of a check plus the previous underwriting lets this work without needing to loop landlord in again (in real time) to release keys.
- lotsofpulp 3y ago
  The broker and landlord have no idea if the money exists just because they get a paper check. Seems like a far worse guarantee than simply transferring the money electronically and the landlord having instant assurance they received it.
  - Dalewyn 3y ago
    If the recipient of a check wants assurance that there is actual money behind the check, they should demand a cashier's check for reasons I already iterated.
    - lotsofpulp 3y ago
      Which is more likely: Receiving a fake cashier’s check, or the opposing party hacking into your bank and showing a transaction that will disappear? Regardless of how unlikely the fake cashier’s check is, a fraudulent electrinic money transfer is still more unlikely. And the electronic transfer is cheaper (free). And less work for everyone.
      - stanleydrew 3y ago
        I think you may be misinformed about "electronic money transfer" at least in the United States. As far as I know the only way to execute an immediately-settled electronic transfer is a wire transfer, which is inaccessible to lots of people and has an associated fee for nearly everyone else.
        culturestate 3y ago
        I was under the impression that immediately-settled electronic transfers were Zelle’s raison d'être. I understand that it’s not universally available, but still.
        oasisbob 3y ago
        You're not using "immediately settled" in the same way as the parent. Zelle transactions are subject to reversion or cancellation ... for days? Compare to, say, settlement cycles in SWIFT: https://www.swift.com/news-events/news/preparing-t1-global-impact-north-americas-move https://www.swift.com/news-events/news/preparing-t1-global-i...
        3y ago
- culturestate 3y ago
  > Checks also let you do fairly complex multiparty commerce without needing to spend millions of dollars engineering it, like an apartment broker requiring you to give them a check for deposit/first month’s rent and signed lease prior to releasing the keys to you. You don’t need to spend millions of dollars engineering an electronic solution to this problem, you just need a legal agreement between the broker and the landlord allowing the broker to accept the deposit on the landlord’s behalf. That’s not exactly a stretch. I don’t even know my current landlord’s name, to be honest. It’s on the lease, but my deposit and rent go to the management company that maintains the building.
jasode 3y ago
>[...] and security. Disagree about the security. I just found out last month how unsecure the use of paper checks actually are because they expose your bank account & routing number. I had an old checking account that was dormant and I hadn't written any paper checks against it for 10 years. What then happened was a landscape service asked me for payment for some work so I had my credit-card ready to settle the bill but they surprised me by saying they would charge extra 3% fee for processing the card. However, they said there was no fee if I paid by paper check. I didn't want to pay hundreds extra in fees so I used that dormant checking account to pay them with a paper check. They cashed my check the next day and I didn't think anything about it. About a month later, I saw a mysterious "e-check" that subtracted money from my dormant checking account! It was not ACH; it was a generated e-check from a billing service popular with adult companies. So somebody from the landscaping company used the numbers on the bottom of my paper check to generate a fake digital check. The thief was on a website that let you pay for a subscription by creating an echeck; the web form would have fields for entering anybody's bank routing # and account #. (Example: https://solutionscout.com/payment-processing/e-check/ https://solutionscout.com/payment-processing/e-check/) When I talked to Bank of America about the fraud, I asked the customer service representative if there was any security setting that would prevent fake checks like that from deducting money from the account. He said "no". The fake e-check even had a totally bogus check # that was out of sequence with my real checks and he said their system doesn't verify the sequential #s. Literally, you're powerless to stop it and the only thing you can do is let the fake e-checks steal your money -- and then later file a fraud claim hoping to get the money back! Paper checks are flawed with a critical security hole by letting companies generate fake e-checks. This means the more paper checks you write and release out into the world, the more of your banking surface area is exposed for you to become a victim of fraud.
- ghaff 3y ago
  >their system doesn't verify the sequential #s Not sure what good that would do. I keep a few checks in a travel folder and have a couple pads of checks in different places around my house. I don't necessarily write checks in sequential order. Yes, they're not very secure. It's also a system that generally works pretty well for a lot of people. And, yes, it's a good idea not to keep an excessively large bank balance for a variety of reasons.
ghaff 3y ago
> Cashier's checks Though I was surprised a couple years ago when I bought a new car. I thought I'd have to run to a bank branch to get a cashier's check to pay the balance (as I've had to do in the past). They were fine with just a personal check. I assume the finance guy had some means to verify I had the balance in my account.
- AndrewStephens 3y ago
  When I came to the US ten years ago I hadn’t written a check in a decade. I was absolutely shocked that I could buy a car and later put down a deposit on a house with a personal check. The amount of trust people are willing to place on a piece of unauthenticated paper is astonishing.
  - Kye 3y ago
    In the US, anyone can sue anyone for anything. If the check comes with a legal agreement, especially notarized, being made whole is easy. Worst case, they take the collateral (house, car) back and get to sell it again. And then there's the fines and jail time if the local prosecutor takes an interest. It's all downside for the aspiring thief. There are kinds of check fraud people get away with it, but none of them involve legal names and an address to send a summons to.
    - lotsofpulp 3y ago
      Being able to sue has no relation to being able to collect any judgments for damages. Even the US government requires cashier’s checks, not personal checks, for passports. >Worst case, they take the collateral (house, car) back and get to sell it again. Worst case is the asset gets trashed or stolen and not recovered, and the seller spends a ton of time and money in court to find out the buyer has no assets to recover from. Edit: I was wrong about the US passport needing a cashier’s check. It was probably for a travel visa, so a different country requiring it.
      - astura 3y ago
dangus 3y ago
Security: not so much, you’re handing the recipient your “user and password” to your account printed right there on the check. Convenience: will be superseded by FedNow. Is already superseded by various apps. Assurance: cashiers checks aren’t really relevant to this discussion. They’re not the same as a check, they might as well be a different product entirely, and they generally cost money to use for everyone except those who have fancy high value bank accounts.
robocat 3y ago
> and I doubt they will ever become truly obsolete. I expect they will just become obsolete slower in the USA than other parts of the world. Personal cheques are already obsolete in my country (New Zealand). And their usage looks to be sharply declining in European countries: https://www.statista.com/statistics/443677/cashless-payment-with-checks-europe/ https://www.statista.com/statistics/443677/cashless-payment-... or countries are trying to stop their usage (UK, Australia). https://www.statista.com/statistics/1055578/check-usage-by-country/ https://www.statista.com/statistics/1055578/check-usage-by-c... implies that the USA likes checks. 30 years ago NZ had over 50% of transactions by cheque. Yes, checks have important benefits but the downsides (fraud, processing costs, credit risk) lead to them becoming uncommon and then obsolete in other countries. No reason the USA will be different.

lotsofpulp 3y ago

The benefits of your first two points are even greater with electronic mechanisms of transferring money. And a big downside of checks is that it reveals your bank account and routing # in an ACH system where money can be “pulled” anytime from your account. Compare to an electronic money transfer system where money is pushed from entity to entity using a unique identifier, but can’t be “pulled”.

patio11 3y ago

Checks also let you do fairly complex multiparty commerce without needing to spend millions of dollars engineering it, like an apartment broker requiring you to give them a check for deposit/first month’s rent and signed lease prior to releasing the keys to you. Note that the check is to the landlord and the broker cannot access her accounts, but visual inspection of a check plus the previous underwriting lets this work without needing to loop landlord in again (in real time) to release keys.

lotsofpulp 3y ago
The broker and landlord have no idea if the money exists just because they get a paper check. Seems like a far worse guarantee than simply transferring the money electronically and the landlord having instant assurance they received it.
- Dalewyn 3y ago
  If the recipient of a check wants assurance that there is actual money behind the check, they should demand a cashier's check for reasons I already iterated.
  - lotsofpulp 3y ago
    Which is more likely: Receiving a fake cashier’s check, or the opposing party hacking into your bank and showing a transaction that will disappear? Regardless of how unlikely the fake cashier’s check is, a fraudulent electrinic money transfer is still more unlikely. And the electronic transfer is cheaper (free). And less work for everyone.
    - stanleydrew 3y ago
      I think you may be misinformed about "electronic money transfer" at least in the United States. As far as I know the only way to execute an immediately-settled electronic transfer is a wire transfer, which is inaccessible to lots of people and has an associated fee for nearly everyone else.
      - culturestate 3y ago
        I was under the impression that immediately-settled electronic transfers were Zelle’s raison d'être. I understand that it’s not universally available, but still.
        oasisbob 3y ago
        You're not using "immediately settled" in the same way as the parent. Zelle transactions are subject to reversion or cancellation ... for days? Compare to, say, settlement cycles in SWIFT: https://www.swift.com/news-events/news/preparing-t1-global-impact-north-americas-move https://www.swift.com/news-events/news/preparing-t1-global-i...
        3y ago
culturestate 3y ago
> Checks also let you do fairly complex multiparty commerce without needing to spend millions of dollars engineering it, like an apartment broker requiring you to give them a check for deposit/first month’s rent and signed lease prior to releasing the keys to you. You don’t need to spend millions of dollars engineering an electronic solution to this problem, you just need a legal agreement between the broker and the landlord allowing the broker to accept the deposit on the landlord’s behalf. That’s not exactly a stretch. I don’t even know my current landlord’s name, to be honest. It’s on the lease, but my deposit and rent go to the management company that maintains the building.

jasode 3y ago

>[...] and security. Disagree about the security. I just found out last month how unsecure the use of paper checks actually are because they expose your bank account & routing number. I had an old checking account that was dormant and I hadn't written any paper checks against it for 10 years. What then happened was a landscape service asked me for payment for some work so I had my credit-card ready to settle the bill but they surprised me by saying they would charge extra 3% fee for processing the card. However, they said there was no fee if I paid by paper check. I didn't want to pay hundreds extra in fees so I used that dormant checking account to pay them with a paper check. They cashed my check the next day and I didn't think anything about it. About a month later, I saw a mysterious "e-check" that subtracted money from my dormant checking account! It was not ACH; it was a generated e-check from a billing service popular with adult companies. So somebody from the landscaping company used the numbers on the bottom of my paper check to generate a fake digital check. The thief was on a website that let you pay for a subscription by creating an echeck; the web form would have fields for entering anybody's bank routing # and account #. (Example: https://solutionscout.com/payment-processing/e-check/ https://solutionscout.com/payment-processing/e-check/) When I talked to Bank of America about the fraud, I asked the customer service representative if there was any security setting that would prevent fake checks like that from deducting money from the account. He said "no". The fake e-check even had a totally bogus check # that was out of sequence with my real checks and he said their system doesn't verify the sequential #s. Literally, you're powerless to stop it and the only thing you can do is let the fake e-checks steal your money -- and then later file a fraud claim hoping to get the money back! Paper checks are flawed with a critical security hole by letting companies generate fake e-checks. This means the more paper checks you write and release out into the world, the more of your banking surface area is exposed for you to become a victim of fraud.

ghaff 3y ago
>their system doesn't verify the sequential #s Not sure what good that would do. I keep a few checks in a travel folder and have a couple pads of checks in different places around my house. I don't necessarily write checks in sequential order. Yes, they're not very secure. It's also a system that generally works pretty well for a lot of people. And, yes, it's a good idea not to keep an excessively large bank balance for a variety of reasons.

ghaff 3y ago

> Cashier's checks Though I was surprised a couple years ago when I bought a new car. I thought I'd have to run to a bank branch to get a cashier's check to pay the balance (as I've had to do in the past). They were fine with just a personal check. I assume the finance guy had some means to verify I had the balance in my account.

AndrewStephens 3y ago
When I came to the US ten years ago I hadn’t written a check in a decade. I was absolutely shocked that I could buy a car and later put down a deposit on a house with a personal check. The amount of trust people are willing to place on a piece of unauthenticated paper is astonishing.
- Kye 3y ago
  In the US, anyone can sue anyone for anything. If the check comes with a legal agreement, especially notarized, being made whole is easy. Worst case, they take the collateral (house, car) back and get to sell it again. And then there's the fines and jail time if the local prosecutor takes an interest. It's all downside for the aspiring thief. There are kinds of check fraud people get away with it, but none of them involve legal names and an address to send a summons to.
  - lotsofpulp 3y ago
    Being able to sue has no relation to being able to collect any judgments for damages. Even the US government requires cashier’s checks, not personal checks, for passports. >Worst case, they take the collateral (house, car) back and get to sell it again. Worst case is the asset gets trashed or stolen and not recovered, and the seller spends a ton of time and money in court to find out the buyer has no assets to recover from. Edit: I was wrong about the US passport needing a cashier’s check. It was probably for a travel visa, so a different country requiring it.
    - astura 3y ago

dangus 3y ago

Security: not so much, you’re handing the recipient your “user and password” to your account printed right there on the check. Convenience: will be superseded by FedNow. Is already superseded by various apps. Assurance: cashiers checks aren’t really relevant to this discussion. They’re not the same as a check, they might as well be a different product entirely, and they generally cost money to use for everyone except those who have fancy high value bank accounts.

robocat 3y ago

> and I doubt they will ever become truly obsolete. I expect they will just become obsolete slower in the USA than other parts of the world. Personal cheques are already obsolete in my country (New Zealand). And their usage looks to be sharply declining in European countries: https://www.statista.com/statistics/443677/cashless-payment-with-checks-europe/ https://www.statista.com/statistics/443677/cashless-payment-... or countries are trying to stop their usage (UK, Australia). https://www.statista.com/statistics/1055578/check-usage-by-country/ https://www.statista.com/statistics/1055578/check-usage-by-c... implies that the USA likes checks. 30 years ago NZ had over 50% of transactions by cheque. Yes, checks have important benefits but the downsides (fraud, processing costs, credit risk) lead to them becoming uncommon and then obsolete in other countries. No reason the USA will be different.