It is Time to Distance from Checks


Jane Larimer

Jane Larimer

President and CEO


The coronavirus pandemic has been a learning experience in many ways, including how we conduct business and make payments. One thing many people have discovered is that paying with paper is a big pain point—especially under the constraints of social distancing—whereas paying electronically, including by ACH, is really very easy.

As an example, having no one in the office to sign checks is a problem when a payment needs to be made, but it doesn’t have to be. No one needs to physically sign an ACH payment, so a payroll or accounts payable department can keep things humming from wherever they’re working. 

Similarly, a business’ accounts receivable department probably wasn’t in the office to handle checks arriving by mail. But when an ACH payment goes straight into a business’ bank account you can imagine what a great help that is. 

And you can bet employees were grateful for Direct Deposit of their salaries and expenses, rather than waiting on a paper check in the mail (or, worse, having to go in to collect it, and perhaps a trip to the bank to deposit it, during a stay-at-home order). 

Businesses, schools, and other facilities, for the most part, started closing in March, the final month of the first quarter. Figures released by the Federal Reserve tell an interesting story about check use in that quarter. It marked the first time in recent history that the Fed’s volume of checks processed fell below 1 billion, to 999 million. That’s down 7.9% from the fourth quarter of 2019, and off 8.4% from a year earlier.

Nacha figures show that ACH check conversion—where paper checks are turned into ACH payments—dropped almost 24% from the second quarter of 2019 to the second quarter of 2020, while volume for check conversion at the point of sale tumbled some 45%. 

All figures show that there is a significant decline in check use going on right now.

The federal government has long required Direct Deposit for many of its payments, including Social Security and federal employee salaries. So there was no surprise when it turned to ACH as the first choice for distributing billions of dollars in stimulus funds to hundreds of millions of Americans. 

Many of us have made a transition to remote meetings and virtual conferences in place of the in-person kind. For a number of businesses, smoothly transitioning from paper checks to making and receiving ACH payments has been another part of the learning curve. 

Nacha recognizes that education is important, which is why we have a blog featuring best practices and other helpful information, as well as our ACH Quick Start Tool, so that businesses can once and for all move from checks to ACH.  

While we all hope that our daily lives and the economy return to normal as quickly as possible, why go back to making payments by paper? Now’s the time for checks to once and for all disappear.