Why This Old-School Payment Method Still Dominates Small Business

It could appear laborious to imagine, however in 2026, most small enterprise homeowners nonetheless use paper checks. 

The analysis exhibits this. Based on a 2024 examine from the Atlanta Federal Reserve, as a lot as 83% of small corporations — these with as much as $10 million in annual revenues — use paper checks. One other examine by an outdoor cost processing agency discovered related (75%) outcomes. And Mineral Tree, a world funds processing firm, stated that in simply the previous 12 months, 57% of companies paid greater than one-quarter of their distributors by way of verify. 

My very own expertise corroborates this. I go to and discuss to numerous small enterprise homeowners yearly. And whereas many depend on digital cost for sure distributors, most are nonetheless doing their verify runs the best way they’ve been doing them for years — even many years.  You’ll assume that, as youthful generations take over, issues would change? Nope.

How can so many enterprise homeowners nonetheless be utilizing paper checks on this modern-day?  Is that this ignorance? No, only a good enterprise apply.

It’s not laborious to grasp. There are apparent causes to stay with paper checks. For instance, there are each the preliminary and longer-term service prices, in addition to the short-term disruption of shifting to an all-electronic cost system in comparison with the return-on-investment for not doing so. Many enterprise homeowners don’t have the interior sources to implement such a mission. Others don’t wish to rock the boat with their suppliers. After which there’s easy demographics: nearly all of small companies are run by older enterprise homeowners — these over the age of fifty — that aren’t solely set of their methods however not anxious to show issues the other way up to repair one thing that for them isn’t actually damaged.

However nearly as good as these causes are, there are even higher explanation why so many small enterprise homeowners are sticking with paper checks.

It’s truly higher safety

Though the Atlanta Fed’s examine stated that utilizing paper checks comes with a extra important threat and prevalence of fraud, I’ve discovered that these dangers will be simply mitigated, and actually are mitigated by a few of my smarter, extra financially-aware purchasers.

A superb system of inner controls ensures that each one checks are locked in a protected and solely launched from custody when a verify run is made. Even then, good monetary managers preserve a strict watch on their verify numbers.

Checks then undergo a technique of approval — manually matched to invoices after which topic to 2 signatures for disbursements over a specific amount. All of because of this by the point a verify is lastly put within the mail, it’s been in comparison with supply paperwork, reviewed, signed and verified by a number of folks in a company, guaranteeing there have been quite a few units of eyes laid on the transaction. 

Doing so slows down the disbursement course of and offers folks time to consider a transaction earlier than the cash goes out the door. My purchasers who pay electronically oftentimes arrange their system with fewer of those processes in place, leaving them uncovered to incorrect funds.

What about fraud? That is simply defended by a well-liked service that’s offered by most banks known as Optimistic Pay. That is the place an organization submits an inventory of funds (together with verify numbers, payee, quantity and date) to the financial institution upfront, and the financial institution solely disburses cash when the verify offered matches that checklist. Most bankers I do know inform me this service works simply as properly — if not higher — with guide checks offered vs. digital funds submitted that may be topic to potential malware or hackers.

And talking of malware and hackers, firms which might be totally reliant on digital funds proceed to be uncovered to knowledge breaches and hacks. Digital cost techniques (ACH, wires, on-line banking) are main targets for fraud, and plenty of assaults bypass the financial institution fully by exploiting folks and processes. A 2025 funds fraud examine from the Affiliation of Monetary Professionals Funds Fraud reported that 79% of organizations skilled precise or tried funds fraud in 2024. A latest FBI report discovered that digital funds are central to losses for each enterprise homeowners and banks, with cyber-enabled fraud accounting for 83% of all reported monetary losses and wire and ACH funds being key channels in profitable fraud circumstances.

The place paper checks actually win

All of those are good explanation why an organization might wish to keep on with a guide verify processing course of. However it’s not the primary motive why I see this so usually in my purchasers. That motive is straightforward: higher money administration. Or ought to I say higher float administration?

That’s as a result of whenever you submit a cost to a financial institution, your cash is straight away gone out of your account, even when it nonetheless takes a couple of days for it to reach on the provider. The financial institution is making its cash, however firms miss out on these additional days of curiosity, which, relying on how a lot money you’ve got, might be important.

There’s additionally the management issue.  Various enterprise homeowners I do know like to chop checks and put them in a drawer. The cash is out of their account so far as their books are involved. However it hasn’t left the financial institution but, which might be crucial for firms going through money circulate challenges or in the event that they’re in the course of a dispute. As soon as a verify is put within the mail, there are nonetheless a couple of enterprise days earlier than it reaches the provider after which will get cashed. All of those additional days give the enterprise proprietor the power to increase their money circulate just a bit bit, with out incurring curiosity prices or having to lean on different sources of financing.

All of those causes clarify why so many enterprise homeowners are nonetheless doing their verify runs the old-school manner: utilizing paper. It could go in opposition to frequent conference. However they’re not mistaken.

It could appear laborious to imagine, however in 2026, most small enterprise homeowners nonetheless use paper checks. 

The analysis exhibits this. Based on a 2024 examine from the Atlanta Federal Reserve, as a lot as 83% of small corporations — these with as much as $10 million in annual revenues — use paper checks. One other examine by an outdoor cost processing agency discovered related (75%) outcomes. And Mineral Tree, a world funds processing firm, stated that in simply the previous 12 months, 57% of companies paid greater than one-quarter of their distributors by way of verify. 

My very own expertise corroborates this. I go to and discuss to numerous small enterprise homeowners yearly. And whereas many depend on digital cost for sure distributors, most are nonetheless doing their verify runs the best way they’ve been doing them for years — even many years.  You’ll assume that, as youthful generations take over, issues would change? Nope.