Nearly $740 million is lost by small and medium-sized businesses in the U.K. every year for a simple reason: They either lose, or forget to cash, their paper checks.
The average amount of money lost when they forget about a check or they lose one is nearly $1,000, Barclays added.
“No business should miss out on their hard-earned takings, but the £550 million [about $740 million] lost each year by SMEs losing or forgetting to deposit their checks highlights the scale of the problem,” reflected Barclays’ head of corporate banking in Northern Ireland, Adrian Doran. “We want to take the hassle out of check depositing for business owners so they can pay in their check instantly through their smartphone or tablet.”
The research highlights the potential financial service providers have in offering SMEs mobile banking solutions, like report deposit capture. But it also points to the issues related to paper checks overall, seen by opponents as a costly, risk-heavy payment method for SMEs.
According to reports, Barclays was the first U.K. bank to deploy a mobile check imaging tool to allow users to pay via check using their smartphone. The initiative, reports added, made “one of the world’s oldest forms of payment more compatible with the demands of modern life.”
Ahead of this solution going live throughout the U.K., Doran said the solution will be particularly useful to Northern Ireland businesses operating in a rural market. “Many people live some distance from a bank branch, so this technology will really benefit them,” the executive said.
While the paper check is widely considered to be not the best payment tool for SMEs, some FinTech players are looking to digitize checks instead of get rid of them altogether.
Earlier this year, U.S. Bank Head of Receivables Sam Robb told PYMNTS that electronic checks can help companies ease into ePayments. U.S. Bank deployed its Deposit Express mobile app, which allows SMEs to deposit checks via mobile device, last March.