Back in the day, paying bills meant writing checks, hunting down stamps and taking a trip to the corner mailbox or the post office. Today payments are frequently made online using debit or credit cards. Check payment processing online or by phone provides additional options for customers who don’t have or who don’t want to use credit or debit cards. However, merchants must be aware of common misconceptions associated with electronic check processing that pose potential hazards for customers’ sensitive financial and personal data.
It’s Safe to Rely on Check Security Features for Compliance
Banks and financial institutions employ multiple security measures to minimize the risks associated with processing checks, including watermarks, specially treated paper and other safeguards. These measures are useful but hardly foolproof. Tokenization provides additional safeguards by substituting sensitive data with a randomized character string, reducing the risk of data theft or fraud during electronic check processing.
Processing Paper Checks is Cheaper than Electronic Check Processing
Processing paper checks is low-tech, but that doesn’t mean it’s cheaper than electronic check processing. In fact, a secure electronic check processing system reduces the need for manual inspection, resulting in significant cost savings.
For instance, a business that processes 500 checks per month could pay thousands of dollars per month for three employees to process invoices, stuff envelopes and reconcile check payments with accounting software. The cost for check payment processing could be significantly reduced by substituting paper checks with online or check by phone payments. A check by phone option is especially convenient for the approximately 10 percent of people who don’t use the internet at all — including online payments.
Customers Prefer Paying by Check
The use of paper checks has declined dramatically since the beginning of the 21st century. A study by Hitachi Consulting in 2008 reported that between 2001 and 2008, paper-based payments dropped from 78 to 38 percent while electronic payments increased dramatically, from 22 to 62 percent. It’s easy to see why. Electronic check payment processing is both quick and convenient. Payments can be processed 24/7 in the privacy of your customers’ own homes.
While it’s true that online data breaches are a real threat, losing a checkbook presents its own set of problems, beginning with bounced checks. In addition, merchants can help consumers overcome their misgivings about electronic check processing by employing strong security measures such as tokenization to protect consumer data.
A Lock and Key Icon Means a Check is Secure
The lock and key icon represents a system of check safeguards developed by the Check Payment Systems Association. While these safeguards definitely reduce the likelihood of fraudulent checks being processed, they are not foolproof. Specifically, they do not equal the level of protection provided by tokenization, which completely replaces personal data with random digits during check transmission and processing.
A Couple of Security Features (on a Check) Are Enough
Unfortunately, even enhanced security measures do not provide complete protection against fraudulent paper checks. As mentioned above, even the most secure paper checks are vulnerable to misuse through checkbook loss or theft. And paper checks that only employ one or two security features are vulnerable to being altered.
Electronic check processing, online or by phone, provides customers with a convenient alternative to credit and debit cards for making payments. Secure check payment processing minimizes the risks associated with electronic check payments without sacrificing convenience. Get in touch with PaymentVision today to learn more about processing all payments securely.