The Understated Value of the Check

It's 2022, and You're Still Paying by Check?! The Understated Value of the Check and Why Fraudsters See It as a Hot Opportunity

“Checks are not going away,” repeat so many of us in the banking and payments processing world, despite the continued pushback and laughs from critics. The stigma around the use of checks was even the focus of an SNL sketch, where they joked about the amount of data needed before it could be tendered. What those script writers didn’t realize was the value and richness of this data, making the check one of the most secure forms of payment for consumers and businesses, as well as its importance in the larger transactional ecosystem linked to big data. 

On the commercial side, organizations large and small have moved away from checks for regular transactions like payroll, although they are still vastly used for other invoices - providing better control over liquidity and transparency with a paper trail.  

Many continue to speak about the growing adoption of newer, digital payments, but don’t address the two basic but significant reasons why checks are still important (and aren’t going away):

  • Checks remain the only payment mechanism where payee name and address are both available and volunteered.
  • Checks are significant when a written record of the transaction/remittance is required to be appended to the payment.

According to a December 2021 Federal Reserve report on non-cash payment methods, checks accounted for nearly 23% of the total value of payments in 2020 (see table below).


Number (Percentage of Transactions)






























Table – Shares of non-cash payments, 2018-2020

The figures above clearly demonstrate that over the last 20+ years, there has been a 180-degree shift in the use of checks. While cards have taken their place for small, everyday transactions like buying a soda at the grocery store, checks are instead used for larger purchases that require a proof of transaction. 

That said, younger generations are not as familiar with the check, exposing a market education gap and an open door for fraudsters to touch higher value payments. While many of us were handed a box of starter checks after opening our first bank account, that process doesn’t happen anymore, leaving new account holders (of all ages) less informed and unfamiliar with the check. As a result, millennials are said to be most vulnerable to check fraud compared to credit cards or contactless transactions. In fact, a school friend of my son’s recently shared how she was defrauded of $3,000 after unknowingly accepting a fake check as an over payment for a couch. 

Such stories are not anomalies, and the fight against check fraud continues to grow - amounting to more than 500 million forged checks each year, and about $10 billion in total annual losses. There isn’t a one-size-fits-all answer for every bank or credit union, but a combination of account holder education to proactively fight losses from the start, linked to advanced fraud mitigation solutions and pattern detection on the institution side, help secure the landscape. 

Over the last few years, shifting consumer behavior and self-service demands have caused newer market entrants and many traditional financial institutions to invest in their digital experience rather than combat fraud head-on. This leaves an opportunity for refreshed payment solutions’ infrastructure, making remote and in-branch workflows more efficient, as well as paving the way for newer fraud-prevention techniques like those that leverage AI, machine learning and other intelligent capabilities to identify patterns of suspicious behavior before they reach the back office.

Checks are not going away despite what some critics may think, and remain a favorite for fraudsters. The time is now to invest in solutions that minimize losses and to secure your check processing workflows, as well as to plan for increased market education for customers and members. 

Secure your payment channels from point of capture to the back office, reduce losses, and build trust with a more protected, confident banking experience for all. Contact our team of payment experts today to learn more about fraud mitigation techniques and solutions for all of your bank’s or credit union’s payment channels. 

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