How to talk to check-loving customers about switching payment methods

Paper checks might not be as popular as they once were, but they’re still a common payment method. Despite the prevalence of digital payment options, billions of checks are written and cashed each year. Some consumers simply feel more comfortable using this classic payment method.

But managing and accepting check payments can be time-consuming and costly for small business owners. Paper checks can be lost or damaged, and processing check payments can take days. Bad checks can result in fees, cash flow problems, and wasted time.

Switching from checks to digital payments: Benefits for you and your customers

Ready to move away from accepting check payments? Talking to your customers about the benefits of online payments can help with the transition. Here are three benefits for you and your customers, plus a few tips on how to talk to your customers about making the switch.

1. Reduce manual recordkeeping

For you: When customers pay using a check, you have to deposit that check to get the money. Mobile deposits can save you a trip to the bank, but they can cost you a small fee or increase check processing time. You also need to manually log that check payment in your books.

But when customers use digital payments, you see that money right away. For QuickBooks Payments customers, payments are automatically tracked and reconciled in your books. No manual recordkeeping is required.

For your customers:  It’s important for customers to keep track of check payments. Checks can take longer to process than most other payment types. Sometimes, checks aren’t properly accounted for (usually in a checkbook ledger). The lapsed time between when a check is written and when it’s processed can lead to unwelcome cash flow surprises for customers.

When customers use digital payment methods, they always know how much they’ve spent. They don’t need to manually track their spending in a checkbook or waste time adding up how much they have left.

Say this: “We’re switching to paperless payments to help us save time and avoid manual recordkeeping. We want to make this easy for you, too—here are some options you can use to pay this bill online.”

2. Increase visibility of payments

For you: If you invoice customers for payments, they might pay up using a paper check. When this happens, you’re left desperately checking your mail, hoping the check will be delivered—hoping it was sent in the first place. If it doesn’t arrive on time, you’ll have to chase down your customers and risk seeming overeager.

When you use digital payments, you gain visibility. You’re notified of the payment status right away. Even if the digital payment takes time to process, you can see the payment status and get notified when the money hits your account.

For your customers: While you’re eagerly checking your mail, your customers are hoping their payment will make it to your business in one piece. In the meantime, their bank account reflects a higher balance than reality. Until you cash their check, they’re in the dark about their payment.

Digital payments eliminate the uncertainty. When a customer pays, the funds leave their bank account right away, so they won’t be surprised by unexpected deposits down the line.

Say this: “We accept many types of digital payments, which can help you pay quickly and keep your records straight. If you’d like to pay online, you can pay us by card or eCheck/ACH transfer.”

3. Reduce security risks

For you: Check fraud is a serious problem for small business owners. You might not know a check is bad or fraudulent until you try to deposit the check and it bounces. When that happens, it’s up to you to contact the customer and ask them to rectify the issue. If you can’t reach them or they refuse to pay, you may need to enlist the help of a collections agency.

Digital payment options eliminate “bad” payments. If an account has insufficient funds, the payment won’t go through, and the customer won’t walk away with products they didn’t actually pay for.

For your customers: For customers, a lost check can be panic-inducing. Checks carry important banking information that could be dangerous in the wrong hands. Your customers risk their financial security each time they mail or submit a check payment.

Digital payment platforms, like QuickBooks Payments, must follow certain requirements designed to protect consumers and business owners alike from fraud and cybercrime. Your customers can rest assured that their financial information is secure when using digital payment methods.

Say this: “We care about your financial security. We offer a plethora of digital payment options to fit your needs and give you peace of mind.”

A few more benefits worth mentioning:

• Digital payments can be cost effective. If you’re still using checks to avoid digital payment fees, it’s time to take another look. Times have changed. QuickBooks offers ACH bank transfers for an affordable flat rate of $10 for amounts over $1,000 and 1% of the transaction for amounts under $1,000. That’s typically less than taking a credit card payment. Now is the time to consider accepting ACH bank transfers and digital payments. You might find that the benefits (hello, increased cash flow) far outweigh the costs.
• Stop wasting time in line at the bank or post office. Imagine how much time you would save if you didn’t have to drive to the bank or post office to collect and deposit checks. Modern consumers appreciate the speed and ease of digital payments. You’ll appreciate the automatic deposits and newfound free time in your schedule.

Steps to take as you phase out paper checks

Once you’ve decided to embrace digital payment options, there are a few things you can do to ensure a smooth transition for your check-loving customers.

Accept a variety of digital payments

There are a number of ways to get paid. Customers prefer to pay using a method that feels comfortable to them. The more payment methods you accept, the more likely your customers will follow through with a transaction.

QuickBooks Payments allows users to accept credit cards, debit cards, and ACH bank transfers. Payments can be made online, over the phone, through an app, or in person using a mobile card reader. Payments appear in QuickBooks automatically, so you never miss a thing.

Talk to your customers

Check-loving customers use checks because they feel comfortable with that payment method. They might be wary of digital payment options or unaware that your business accepts other payment types.

As you begin to phase out check payments, talk to your customers about their options. Let them know that change is coming and make sure the benefits of digital payments are part of the discussion. Clearly post the payment methods you accept on your website and near your register to eliminate confusion and spread the word.

Crack down on your check acceptance policies

Some customers will insist on using checks, even after they’ve been shown the benefits of digital payments. If it’s not possible for you to stop accepting checks altogether, take steps to minimize check usage and stop bad checks before they bounce.

• Create a “bad check” policy. A bad check policy lets your customers know that they’ll be on the hook for bounced checks—plus an added processing fee. This may serve as a deterrent to bad check writers.
• Only accept cashier’s checks. A cashier’s check is guaranteed by a bank—so the bank, rather than the customer, is responsible for paying the amount. Cashier’s checks are considered guaranteed funds and offer the most fraud protection for business owners.
• Learn to spot bad checks. The last few digits of the Federal Reserve number at the top of the check should match the first few digits of the routing number at the bottom of the check. Additionally, checks without perforated edges may be counterfeits.
• Set up a check acceptance policy. A check acceptance policy outlines how you and your employees handle check acceptance and deposits. You and your employees should know how to spot a bad check and what to do if you encounter one.