If you thought paper checks were obsolete, think again. The data tells a different story, and it’s one that most small business owners have already figured out.
According to a 2024 study from the Atlanta Federal Reserve, as much as 83% of small firms with up to $10 million in annual revenues still use paper checks. Another study by a payment processing firm found similar results at 75%. And Mineral Tree, a global payments processing company, reported that 57% of businesses paid more than one-quarter of their vendors via check in just the past 12 months.
It’s not ignorance driving this choice. It’s practicality.
The Real Cost of Switching
Here’s what most articles get wrong about this debate: they assume electronic payments are obviously better. But switching systems isn’t free, and it’s definitely not painless. There’s the initial setup cost, the ongoing service fees, and the real disruption that comes with overhauling how a company handles its most critical function: paying people.
Many small business owners lack the internal resources to manage a transition like this. Others don’t want to disrupt relationships with suppliers who expect checks. Then there’s the demographic reality. The majority of small businesses are run by owners over 50, and they’re not exactly eager to flip their entire payment system for a solution to a problem they don’t have.
These are legitimate business concerns, not generational stubbornness.
Security Isn’t as Simple as It Seems
The Atlanta Fed’s study flagged fraud as a risk with paper checks, and they’re not wrong. But this risk is manageable, and frankly, many business owners who understand their own finances already manage it.
A solid system of internal controls works. Keep checks locked in a safe. Release them only during designated payment runs. Track check numbers religiously. Require multiple signatures on payments above certain thresholds. Match every check to source documents before it leaves the building. By the time that check hits the mail, it’s been reviewed and verified by multiple sets of eyes.
This process slows things down intentionally. That’s a feature, not a bug. It gives people time to catch errors or fraud before money actually leaves the account. Electronic payment systems, by contrast, often operate with fewer checkpoints. The result? Incorrect payments slip through more easily.
What about the malware and hacking threats that plague digital systems? Banks offer Positive Pay, a service where companies submit payment details in advance and the bank only clears checks that match that list. Most bankers report this works just as effectively with manual checks as with electronic payments. Meanwhile, electronic systems remain attractive targets for cybercriminals. According to the Association of Financial Professionals Payments Fraud report from 2025, 79% of organizations experienced actual or attempted payments fraud in 2024. The FBI has found that cyber-enabled fraud accounts for 83% of all reported financial losses, with wire and ACH payments being central channels in successful fraud cases.
So no, paper checks aren’t a riskier choice when implemented properly. They’re actually more transparent about risk.
The Float Advantage Nobody Talks About
Here’s the real reason small business owners cling to paper checks: cash flow management.
When you submit an electronic payment, your money vanishes from your account immediately, even though it takes several days to reach the recipient’s bank. The financial institution gets to keep that float and collect the interest. Your company gets nothing but the expense.
With checks, the math changes. The money leaves your books when you write the check, but it doesn’t actually clear your bank account until the recipient deposits it. Depending on mail delays and processing times, that could be a week or more. For companies managing tight cash flow, those extra days matter. They can mean the difference between smooth operations and a desperate scramble for short-term financing.
It’s not dishonest. It’s financial management. And it’s especially valuable for businesses facing cash flow challenges or navigating disputes where every extra day of liquidity helps.
The Generational Myth
You’d expect younger business owners to abandon checks entirely. They haven’t. The data doesn’t show a generational shift happening. Sure, many companies use electronic payments for certain vendors. But most still do their regular check runs the way they always have. The practicality hasn’t changed. The costs of switching still outweigh the benefits.
Sometimes the unconventional choice is the right one. Sometimes what looks like a relic is actually the smartest solution for your specific situation.
