Using paper checks to transfer money is rapidly falling out of favor with consumers, who increasingly prefer electronic forms of payment – a trend that may have implications for truckers and their freight payments.
According to the PYMNTS Disbursement Satisfaction Index, a survey compiled by PYMNTS.com and Ingo Money, checks ranked 4.4 out of 100 in terms of preferred payment methods among consumers – the lowest score of any disbursement method, even though 22 billion checks representing $22 trillion in value are disbursed every year, according to the U.S. Federal Reserve.
This survey of 2,528 consumers examined disbursements in the form of cash, check, direct deposit, instant credit pushed to a card and non-instant credit pushed to a card.
The average “disbursement index score” across all use cases and payment methods hit 52.8 with consumer satisfaction highest for direct deposit, followed by instant credit pushed to a card (71.9), cash (67.1) and non-instant credit pushed to a card (48.3).
The use cases and third parties examined in the index range from insurance companies and the payment of claims, employers and payroll (including gig economy workers), lenders and loan proceeds, merchants and store refunds, law firms and legal settlements, and employees and corporate reimbursements, among others.
“Despite checks’ rampant unpopularity, they unfortunately remain an old-school staple in the U.S. economy and create tons of friction for the consumer,” noted Karen Webster, CEO of PYMNTS.com, in the survey report.
“Consumers still accept them, of course, because they obviously want their money, but they’d rather be paid any other way,” she added. “What’s clear, across use cases and consumer profiles, is that it’s time for corporate disbursers to move away from their analog payments model and into digital ways to push funds to consumers.”
"The progression of speed and experience for consumers from paper check to direct deposit and now push payments is undeniable,” added Drew Edwards, Ingo’s CEO. “Consumers expect every aspect of their lives to be instant, including how they get paid and how quickly they can access funds. Creating a benchmark for measuring how and why consumers get paid, as well as their preferences for each [payment method], is critical for continuing to evolve ever faster disbursement methods.”