Why This Old-School Payment Method Still Dominates Small Business — and How It Gives Owners an Edge

It might appear laborious to imagine, however in 2026, most small enterprise homeowners nonetheless use paper checks. 

The analysis exhibits this. In line with a 2024 examine from the Atlanta Federal Reserve, as a lot as 83% of small corporations — these with as much as $10 million in annual revenues — use paper checks. One other examine by an outdoor fee processing agency discovered related (75%) outcomes. And Mineral Tree, a worldwide funds processing firm, mentioned that in simply the previous 12 months, 57% of companies paid greater than one-quarter of their distributors by way of examine. 

My very own expertise corroborates this. I go to and speak to numerous small enterprise homeowners yearly. And whereas many depend on digital fee for sure distributors, most are nonetheless doing their examine runs the best way they’ve been doing them for years — even many years.  You’ll assume that, as youthful generations take over, issues would change? Nope.

How can so many enterprise homeowners nonetheless be utilizing paper checks on this modern-day?  Is that this ignorance? No, only a good enterprise observe.

It’s not laborious to know. There are apparent causes to stay with paper checks. For instance, there are each the preliminary and longer-term service prices, in addition to the short-term disruption of transferring to an all-electronic fee system in comparison with the return-on-investment for not doing so. Many enterprise homeowners don’t have the inner sources to implement such a undertaking. Others don’t wish to rock the boat with their suppliers. After which there’s easy demographics: the vast majority of small companies are run by older enterprise homeowners — these over the age of fifty — that aren’t solely set of their methods however not anxious to show issues the wrong way up to repair one thing that for them isn’t actually damaged.

However pretty much as good as these causes are, there are even higher the explanation why so many small enterprise homeowners are sticking with paper checks.

It’s really higher safety

Though the Atlanta Fed’s examine mentioned that utilizing paper checks comes with a extra vital threat and incidence of fraud, I’ve discovered that these dangers will be simply mitigated, and actually are mitigated by a few of my smarter, extra financially-aware purchasers.

An excellent system of inner controls ensures that each one checks are locked in a secure and solely launched from custody when a examine run is made. Even then, good monetary managers maintain a strict watch on their examine numbers.

Checks then undergo a technique of approval — manually matched to invoices after which topic to 2 signatures for disbursements over a certain quantity. All of because of this by the point a examine is lastly put within the mail, it’s been in comparison with supply paperwork, reviewed, signed and verified by a number of folks in a company, guaranteeing there have been quite a few units of eyes laid on the transaction. 

Doing so slows down the disbursement course of and provides folks time to consider a transaction earlier than the cash goes out the door. My purchasers who pay electronically oftentimes arrange their system with fewer of those processes in place, leaving them uncovered to incorrect funds.

What about fraud? That is simply defended by a preferred service that’s offered by most banks known as Constructive Pay. That is the place an organization submits an inventory of funds (together with examine numbers, payee, quantity and date) to the financial institution prematurely, and the financial institution solely disburses cash when the examine offered matches that checklist. Most bankers I do know inform me this service works simply as effectively — if not higher — with handbook checks offered vs. digital funds submitted that may be topic to potential malware or hackers.

And talking of malware and hackers, firms which are totally reliant on digital funds proceed to be uncovered to information breaches and hacks. Digital fee techniques (ACH, wires, on-line banking) are main targets for fraud, and plenty of assaults bypass the financial institution totally by exploiting folks and processes. A 2025 funds fraud examine from the Affiliation of Monetary Professionals Funds Fraud reported that 79% of organizations skilled precise or tried funds fraud in 2024. A current FBI report discovered that digital funds are central to losses for each enterprise homeowners and banks, with cyber-enabled fraud accounting for 83% of all reported monetary losses and wire and ACH funds being key channels in profitable fraud circumstances.

The place paper checks actually win

All of those are good the explanation why an organization could wish to stick with a handbook examine processing course of. But it surely’s not the principle cause why I see this so usually in my purchasers. That cause is straightforward: higher money administration. Or ought to I say higher float administration?

That’s as a result of while you submit a fee to a financial institution, your cash is instantly gone out of your account, even when it nonetheless takes a couple of days for it to reach on the provider. The financial institution is making its cash, however firms miss out on these further days of curiosity, which, relying on how a lot money you might have, might be vital.

There’s additionally the management issue.  Various enterprise homeowners I do know like to chop checks and put them in a drawer. The cash is out of their account so far as their books are involved. But it surely hasn’t left the financial institution but, which might be crucial for firms going through money circulation challenges or in the event that they’re in the midst of a dispute. As soon as a examine is put within the mail, there are nonetheless a couple of enterprise days earlier than it reaches the provider after which will get cashed. All of those further days give the enterprise proprietor the power to increase their money circulation just a bit bit, with out incurring curiosity prices or having to lean on different sources of financing.

All of those causes clarify why so many enterprise homeowners are nonetheless doing their examine runs the old-school approach: utilizing paper. It might go towards frequent conference. However they’re not incorrect.

It might appear laborious to imagine, however in 2026, most small enterprise homeowners nonetheless use paper checks. 

The analysis exhibits this. In line with a 2024 examine from the Atlanta Federal Reserve, as a lot as 83% of small corporations — these with as much as $10 million in annual revenues — use paper checks. One other examine by an outdoor fee processing agency discovered related (75%) outcomes. And Mineral Tree, a worldwide funds processing firm, mentioned that in simply the previous 12 months, 57% of companies paid greater than one-quarter of their distributors by way of examine. 

My very own expertise corroborates this. I go to and speak to numerous small enterprise homeowners yearly. And whereas many depend on digital fee for sure distributors, most are nonetheless doing their examine runs the best way they’ve been doing them for years — even many years.  You’ll assume that, as youthful generations take over, issues would change? Nope.