For those career-driven individuals who are itching to start their own business, there is one increasingly common trend to keep in mind: no need for checks. While being able to accept personal checks – or even a check from another company – was a mainstay in the business world for decades, it appears as if entrepreneurs have decided to move toward other payment options.
Are you thinking about starting your own business? If recent trends are any indication, ensuring that you have a strong credit, debit and mobile payment option in place are much more critical than the ability to accept checks.
According to recent reports, more entrepreneurs want to go paperless and see checks as a mere representation of the monetary past.
James Wahba is one of those individuals. When Wahba started Projective Space, a co-working facility in Manhattan, his company took checks. However, within one month, Wahba said that he eliminated the option.
“No one had a problem with it,” Wahba explained to Crain’s New York Business. “A lot of our members like paying by credit cards. Some can get points and rewards.”
Wahba added that it was too difficult to track down the checks from his on-the-go tenants, and that he now automatically debits tenants’ payments via mobile processor Stripe.
Citing data from he Federal Reserve Payments Survey released in December 2013, the news source stated that the total number of checks from businesses and consumers that were paid declined by 9.2 percent per year from 2009 to 2012.
Additionally, the Association for Financial Professional’s (AFP) annual Payments and Fraud Survey found that 82 percent of the payments formats targeted by criminals were in the form of checks. The most prevalent check fraud method is “counterfeiting by altering the MICR line on the check,” according to the report, and 62 percent of respondents cited it as a major issue.
Even so, not all businesses might be able to do away with checks completely – at least, not immediately. For those that want to consider a sort of transitional period, all hope is not lost.
Mobile check deposits have also increased in popularity, and give business customers an easy way to move money, just through their phone or mobile device. Earlier this year, Wells Fargo announced that businesses have made more than $1 billion in mobile deposits through the bank’s mobile deposit service.
“For people who are always on the go or out of the office, mobile-deposit capability is a major asset because it does something huge: it eliminates the time spent driving to the bank or the office to make deposits,” the head of Wells Fargo Wholesale Internet Solutions Secil Watson, said in a statement.
However, entrepreneurs need to remain up-to-date on what options are out there, and what would work best for their firm. PayPal announced to customers through an email earlier this week that its mobile check deposit option was no longer available. PayPal says no, Wells Fargo says yes.
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