While it’s tempting to think we will see the extinction of the paper check in the not-so-distant future, the reality is that a centuries-old form of payment is still widely used, especially in certain pockets of the economy.
A new PYMNTS report found that 42% of millennials still use paper checks when it comes time to pay their rent.
“As much as we would love to think that it would go away as fast as we maybe originally anticipated, we don’t necessarily see the drop as we all anticipated,” Bobby Rahmanian, chief product officer at CheckAlt, told PYMNTS.
For that reason and others, businesses must offer their customers options. Rahmanian noted that CheckAlt’s customers provide payment options to its customers and that CheckAlt customizes its platforms to accommodate them.
CheckAlt provides lockbox and treasury management solutions for financial institutions and businesses across multiple industries in the U.S.
Room for Efficiency
Paper checks are not the only seemingly antiquated practice that businesses must accommodate. Rahmanian pointed to several findings in the PYMNTS report, The Treasurer’s Guide to AR Payment Optimization.
One is that 15% of B2B receivables in the U.S. are delivered late. Rahmanian explained that the majority of these are paper checks making their way through the mail.
Others, though, begin as electronic payments made on bill pay platforms but get dropped down to checks when the business that is to receive the payment is not registered on that online bill pay registry. In a case like that, the digital payment becomes a paper check making its way through snail mail.
“That really plays as a big part of our core of our business and our strategy,” Rahmanian said.
Another finding he pointed out was that paper invoices are still the norm for U.S. businesses when finalizing B2B payments, with 75% of the approximately 25 billion invoices sent annually requiring manual processing.
When engaging with large organizations, the company advises them to consider the return on investment (ROI) of CheckAlt’s products and services not only within its division but across the board. When engaging with much smaller organizations, the company focuses on how its platform brings efficiencies.
Regardless of the institution’s size, many respond to customers’ requests for other forms of payment. Its customers are asking if they can pay via Zelle, Venmo, and other products and services.
“They reach back to us and say, ‘What do you have to offer me?’ Rahmanian said. “That is the exciting yet challenging part for me and my team and CheckAlt in general is, how do we create platforms that can provide options across the board?”
He added that too many businesses are not offering that kind of service. The PYMNTS report found that nearly 60 percent of B2B customers stated they have yet to experience personalized interactions with partners that would generate long-term loyalty.
CheckAlt, on the other hand, provides personalization to its customers by working to understand their world and then bringing its products and services to life in a way that fits that world.
The company customizes its products for different industries so that features can be turned on and off as needed and verbiage can be provided that meets the needs of, say, a property management company or a financial institution.
In June, CheckAlt partnered with the property management platform LetUs by RentMoola to streamline paying rent by check.
“Property management is one of our biggest verticals,” Rahmanian said.
He added that while many people believe this segment is stuck in the paper world, both businesses and consumers want choice.
“Some of the stats that I thought were interesting here is that 42% of millennials are still using checks for some transactions in their lifestyle. But they are also using a huge amount of electronic payments.”
Here, too, CheckAlt provides choices to customers. It offers checks, credit cards and ACH, and it’s working on real-time payments for the future.
In other recent news, Credit Union Service Organization (CUSO) LEVERAGE Payment Solutions adopted CheckAlt’s Loan Pay platform in July.
Here, too, the goal is to provide customers with a choice. Loan Pay is an omnichannel experience CheckAlt can bring to credit unions and other financial institutions and banks in general.
If customers want to digitally interact with the credit union, the Loan Pay platform allows them to make payments online. If they want to call the credit union over the phone, the agent or the call center can do whatever they need on the Loan Pay platform.
“Consumers want choices across the board but the experience they have at the credit unions is that many members may be calling via phone or they would act via the IVR [interactive voice response],” Rahmanian reported.
While phone calls and paper checks are still around, the number of options has not stopped growing.
Rahmanian noted that the payments industry is both vibrant and challenging.
“What really keeps me up at night is, how do we think about the next evolution of payments and make sure that we can think about how that fits within not just our world, but our clients’ world, and therefore how do we build that into our platforms?”