Will Checks Soon Disappear?

Here is another change in lifestyles that is happening around us. In the 21st century, what could be more ridiculous than checks? A paper check is a little piece of paper upon with incredibly sensitive information printed in a font from the punch-card era of computing. Anyone can easily steal money from your checking account if he or she can obtain the numbers printed along the bottom edge of your checks.

checkIf you pay by check anywhere, anyone who touches the check has access to the routing and account numbers, they are encoded on the bottom of the check in magnetic ink. It’s called the MICR line. When you pay your mortgage payment, your electric bill, or any other bill by check, a dishonest employee in the company’s mailroom can easily copy the numbers printed along the bottom edge of your checks and then have new checks printed that he or she can use to empty your checking account.

Luckily, paper checks for paying bills are fast disappearing. As genealogists/micro-historians, should we be recording this change in our lives? Our descendants will probably be fascinated that we used paper “I.O.U.s” in the good ol’ days, I.O.U.s that promised payment if given to a bank.

mail_thiefIn fact, checks have obvious security problems. Millions of checks are stolen each year, either directly from the postal service or from mailboxes after the mailman has delivered the check. Because of the high theft rate of checks in the mail, the Social Security Administration and thousands of payroll services have switched from issuing checks to direct deposit to payees’ bank accounts.

Unlike electronic deposits and even credit cards, checks entail significant risk, if stolen. Payroll checks and government checks will usually be replaced, if stolen, but personal checks vary widely. Some banks will provide insurance on checks while others do not. The so-called free checking accounts rarely are insured. If a thief steals an uninsured check and cashes it, you lose the money. In contrast, all credit cards in North America and in many other countries are fully insured against theft or fraud. Even better, electronic deposits avoid most of the security issues since thieves normally do not have access to the information required. Electronic payments theoretically could be hijacked, but such crimes are rare. Theft of checks is much easier and far more common.

Checks also depend on trust in a manner not required by other forms of payment. When someone pays by check, the receiving party has to hope that the checking account has sufficient funds to cover payment by the time the check reaches the bank. In effect, writing a check is simply handing someone a note that says, “I’ll gladly pay you Tuesday for a hamburger today.” In some percentage of cases, the check bounces.

In contrast, payment by credit card, debit card, PayPal, Apple Pay, or any other online transaction doesn’t require any trust at all. The receiving party, usually a merchant, receives confirmation from the card holder’s bank within seconds that the funds are available and will be transferred to the recipient’s bank account. In an in-person transaction, all this happens within seconds, typically while the purchaser is still standing in front of the merchant’s employee. Checks never have that level of security for the recipient.

Of course, payment by cash does not require any level of trust at all; but, carrying cash creates all sorts of other security problems. Cash is easily stolen or lost and, if that happens, there is no way to get the money back. If anyone is concerned about security, cash is probably the worst method of making payments simply because of the problems associated with carrying of cash in a pocket or purse.

Several electronic invoicing and payment methods have become very popular in recent years. Your bank’s “pay bills online” gives much faster and more secure results than do paper checks. Apple Pay, Android Pay, Google Wallet, Amazon Payments, PayPal, and even Bitcoins collectively are becoming more and more popular every year and also are replacing paper checks. One thing in common with all of those services is that they require a handheld device or a web browser on a desktop or laptop.

Obviously, not everyone today has a computer, a smartphone, a credit card, or a “pay bills online” bank account. However, the number of people without a modern electronic payment method is dropping rapidly every year and will soon approach zero.

Will paper checks disappear? I believe they will and probably will do so within the next decade. In fact, I would say “good riddance” to checks and checkbooks. I now write fewer than three or four paper checks per year, and I believe millions of others do the same. I pay almost all my bills by debit card, credit card, PayPal, electronic funds payments, or by my bank’s “pay bills online” service. I find those methods to be much safer than paying by check or by cash. I no longer carry a checkbook with me. Also, most payments made to me are done via direct deposit, PayPal, or credit card. I rarely see a paper check any more.

The world is changing rapidly around us in this technology age. Sometimes change is a good thing, sometimes not so good. In this case, the elimination of paper checks strikes me as very good thing.

What do you think?

50 Comments

I agree with you that they will disappear but until they do, I still like the paper check.

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A long as there are people like my husband who do not trust electronic banking, they will remain. I rarely write any cheques, using interac transfers and online banking to care of most of my money transactions.

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Please find a solution for me – I give Christmas and Birthday money to children and grandchildren. Almost always by cheque as we don’t live near enough or see each other on those special days. How am I going to do it now? Loaded gift cards are not the answer – I’d never know what shops to buy them for and sending loaded credit cards through the mail is just as dangerous as a cheque. Ideas, please! Of course, I could always stop sending anything but a card or letter, I suppose! I know the girls learned how to open an account for themselves at the bank so they could cash or deposit the cheques which made the early ones a learning experience too!
Oh, and how do I get an acknowledgement for the gifts – that would be lovely. My mother always sent cheques so she could make sure the family always got the money so I guess some of us didn’t say thanks then either.

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    I send my son money via Paypal. It gets sent directly to his checking account which is linked to his Paypal account. There is a small handling fee on my end to do this.

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    Sending and receiving money to personal friends or family within the U.S. via PayPal is FREE to both parties if the sender uses only a PayPal balance or bank account, or a combination of their PayPal balance and bank account. There is no charge to the recipient. However, there is a charge to the recipient IF THE RECIPIENT IS SELLING GOODS OF SOME SORT. That is a business transaction, not a personal transaction.

    You can send money to your son without either one of you paying any fees, as long as you send the money from a PayPal balance or a bank account.

    See https://www.paypal.com/us/selfhelp/article/What-are-the-fees-for-PayPal-accounts-FAQ690 for the details.

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    You can transfer the money directly to their bank account. Simple.

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    —> Almost always by cheque as we don’t live near enough or see each other on those special days. How am I going to do it now?

    Use your bank’s “pay bills online.” It actually does create a check, printed and mailed by your bank. Checks may be sent to individuals as well as to corporations. The recipient receives a paper check, unless you specify his or her bank account number to receive an electronic payment.

    I use my bank’s “pay bills online” several times a month to pay bills and (occasionally) to send a check to an individual. It works well and is much easier than writing checks, buying envelopes, buying stamps, and all that.

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    I’ve had gift cards go missing when it comes to birthday’s etc. What I do now is send them Amazon gift cards. You can do it online and they get notified via email that they have a gift from Amazon. Amazon seems to have everything now so that is my safe gift to people.

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I haven’t yet transferred to electronic payment of anything except online purchases. When I think if using electronic payment for everything it feels like I don’t have control of my money — it’s all just numbers on a computer or in the cloud. You stated that it’s easy for someone to copy the numbers on a check and empty a bank account but isn’t it just as easy for someone to copy credit card information (# on the front and code on the back) and/or steal a credit card and charge the maximum amount? All that being said, I agree that checks probably won’t be around in 10 or 15 years.

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    —> You stated that it’s easy for someone to copy the numbers on a check and empty a bank account but isn’t it just as easy for someone to copy credit card information

    There is a major difference.

    Credit cards are always insured in North America and in many other countries. Checks may or may not be insured, depending upon your bank.

    If your credit card numbers are stolen, you won’t lose any money although you certainly will have some inconvenience.

    However, if your checking account numbers are stolen, your bank may or may not offer insurance. You could lose the money if there is no checking account insurance. You need to ask at your bank to see if your checking account is insured.

    You might want to read “Every Type of Check Fraud You Have to Worry About” at https://goo.gl/klbmIU

    Also, here is a quote from the legalbeagle.com web site: “Stolen checks are a major problem, especially in the current climate of identity theft. It is often the case that a stolen check will be taken to a bank to be cashed. There are no federal laws specific to a bank’s responsibility to guarantee that the person presenting the check for payment is the legitimate recipient of the funds.”

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Interesting article, and even more interesting comments.
I live in a “far-out place on a dark continent” (in South Africa), and yet we seem to be much more progressive in banking than the good old US of A. Personally, I haven’t used nor seen a cheque in the last DECADE. Credit cards and online banking are the order of the day.
Be assured, cheques WILL disappear, just as fixed-line telephones have done. The few surviving ones are already ‘relics of the past’.

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    I don’t know about that. I pay many of my bills by check. And we have a landline phone as well. I remember many times when there was some regional/country emergency you could not get squat out on a cell phone but you could with a landline. We have problems with our cell provider (fill in the name because they all do) where calls are not put through but go instead to voice mail. We’ve had calls not come through ever as well as voice mails not appear until two days later. Cell providers have problems at the back end we cannot see. When you lose your land line you know it. There will be a check in one hand and my landline phone in the other until the day they both disappear.

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I bought two new boxes of checks as I ‘m almost out of my previous order. I ordered a new design. I write one or two checks a month, so use them up I will, even if I takes a few years.

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About the only thing I use paper checks for are genealogy purchases!
Often, places want a paper check for purchasing copies of death certificates or obituaries. Many times the index is available online, but to see the actual document requires payment by check. I do wish they would decide to use PayPal or some other online payment. Some states use VitalCheck to provide copies of death certificates – which charges what I consider EXORBITANT fees to use a credit card – so I refuse to be gouged – I’ll send a check.

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    Nancy,
    I so agree with you! I just had to send a $10.00 check for a death certificate to the Vital Records Office, Augusta, Maine. I, also, refuse to pay the ridiculous fees of “VitalCheck”. You would think that this day and age government websites would be more up to speed?
    Thanks for your comment.
    Jean

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Nope. Not me. No online banking for me either. Still using checks until I’m forced to do otherwise. I prefer to pay cash only too.

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When I pay electronically I have records to show money was sent. When I pay by check I have cancelled checks to show money was received. Big difference. Nevertheless, I still haven’t used up the 100 checks I ordered from the bank in 2011. Banks offer a convenient, secure transaction environment that guarantees restitution (if certain conditions are met) because not handling checks saves them a lot of money.

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Just to play “devil’s advocate” here, electronic banking is all well and good until the bank is hacked, or the zombie apocalypse, or some other catastrophe which will render the “electronic” part of electronic banking DOA. Don’t get me wrong, I also do 95% of my payments by electronic banking, and I know (having worked for a bank) that in the case of any of the before mentioned issues, paper checks are worthless as well, therefore I also have a stash of cash “just in case”.

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    If the bank is hacked, you lose no money. All U.S. banks are insured by FDIC.

    If we all suffer a zombie apocalypse, we won’t be writing any checks. All banks will be out of business anyway so checks will be worthless.

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You are certainly right about checks Dick. I’m a senior who welcomes change, especially in how we control our money.
I’ve used electronic checking for several years. I pay all my monthly bills in one sitting in about 20 minutes compared to the hour it used to take to write a check, put it in the envelope & then pay nearly 50 cents per item to mail them.
if I don’t want a bill paid until a certain day later in the month, I can set that date electronically also. I use my debit card in stores. It provides a running total of what I spend within 24 hours.
I refuse to pay $5.00 to a store that sells all types of gift cards. Malls often charge even higher rates for a “mall card” that can be used in all stores. My grandchildren live close & we are together at the holidays. So I usually resort to cash rather than checks for gifting. I’ve never had a regifting problem with cash.🤑
My frustration is paying property taxes in a small community that has no electronic capabilities. I have to write a check for those. Luckily the check finally appears in my electronic banking when they finally reconcile their info with the bank.

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Thanks for the suggestion of using bank bill pay for personal transactions. I hadn’t thought of that! I am still going to play catchup for birthday, Christmas, annual gift etc with checks when I see my son, currently in West Africa, in Central America in the spring.

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I had a debit card and someone somehow got my card numbers and ran up charges of about $10,000. I had only used it for ATM transactions. We were reimbursed the money, but I am not thrilled about debit card transactions but I do use online banking and checks on occasion.

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Once people become too old and confused to operate a computer (and have no nearby children or grandchildren or trusted young person to help them pay online bills), then what? Writing a check, addressing an envelope, and taking it to a secure U.S. Postal Drop (not your street mailbox!!!) is still something an elderly person could handle while trying to remain living at home. Computers (and other high-tech devices) are complicated enough for some Baby Boomers already. Scary to think of depending on them once cognitive function declines!

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“However, the number of people without a modern electronic payment method is dropping rapidly every year and will soon approach zero.”
Doubtful that it will approach zero anytime soon. We live in a rural area with many Amish and Mennonite people who will probably never use technology like the rest of the world. Even the non-Amish folks around still prefer checks and cash, as some places here this is the only way you can pay. I’m sure in large cities and for many people online paying is the choice way to pay, but bring cash or a local check if you’re going somewhere rural.

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Are cheques really spelled checks in the USA?

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    Yes, they are! Lots of little spelling differences like that between “British” English and “Anerican” English! 😊

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Dick,
In 1967 I began work on my Yale PhD dissertation, “The Economics of an Automated Payments System.” Advocates of electronic payments were confidently predicting a checkless society by 1975. While you certainly have the direction of change right, we will not get rid of checks in the next ten years. The history of payments systems is that we keep getting more of them, but almost never kill any off.
Your discussion of risks is generally correct, but when you talked about “insured checks” you lost me. Your bank has a legal obligation to replace funds in your checking account if the check is stolen and negotiated by someone other than the intended payee. They will charge it back to the bank that gave it to them and the loser will be the individual or firm that first deposited it in a bank.
While credit cards are generally safer than checks, debit cards are not–they have many of the same risks as checks with fewer legal protections.

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    —> While credit cards are generally safer than checks, debit cards are not–they have many of the same risks as checks with fewer legal protections.

    Once upon a time, debit cards were not insured. However, that changed some years ago. VISA and MasterCard debit cards now carry the same insurance against fraudulent uses as do normal credit cards.

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I agree that the vast majority of Americans will have access to electronic payments. BUT and its a very BIG but, there are still millions that do not and will not have access. Social Security still sends out hundreds of thousands of checks because of lack of access. About 20% of all Americans have zero access right now and have no banking relationships at all. Just look at voting, millions have no form of government ID to show at the polls to vote – and they don’t want one in most cases. There are some stores today who do not accept cash – causing millions to not be able to shop there for whatever reason – millions. In many foreign countries virtually no one has access to the banking system. Less than 10% of Mexicans have a bank account at all. Hard to believe but true. In a number of European countries, if you walk into a bank, they look at you and ask what you want. The bank is not for “customers”, it’s for businesses, not regular people. Strange as it seems, the majority of people on Earth (i.e., China, India, southeast Asia, etc.) have no access to banks at all.

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I write one check a month to my HOA, because that (or cash) is all they take. All other monthly bills are automatic payment. To the person who had $10,000 charged on a debit card, I only keep enough in the account linked to the card to pay bills. I also use it for daily things like gas, groceries, etc. I made sure it does not have “overdraft protection” so it is not linked to any other account that could be drained if there is no money in the debit card account. If someone had the card number and they tried charging more than the small amount in the account, the transaction won’t go through because there is no money there. I never use cash for anything (except buying copy cards at the FHL).

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My bank will not accept online payments for taxes. The only way to pay my property tax and income tax is by check. Do all banks do this and if so how do others pay their taxes?

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I just had fun reading all the comments on this article. I too hardly ever write a check these days. My father, born in 1909, thought credit cards were terrible and dangerous, and much to my distress, he carried and paid cash for everything. This was in spite of the fact that most of his working career was with Univac-Remington Rand, and he even set up and supervised plants that made punch cards for computing. He just didn’t live long enough to see the changes we have now.
You asked if we shouldn’t be documenting our evolution to a paperless world, but no one seemed to respond to that. Yes, we should! This is another good reason to get going on one’s own memoir.

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We get our payroll and pension payments by direct deposit – mainly for the convenience versus any security concerns. there may have been some Social Security issues with payments by check; however, the primary reason for SSA to go to direct deposit was the cost – much less expensive than having the Treasury Dept print and mail checks.

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As long as my church does not accept credit cards etc. for donations I will still use the check system. Also, at my apartment, they do not accept credit cards. You can only pay with check, money order, or cash. And there are other places that are the same. So I think that ten years may be short-sighted. I look for a 15 to 20 year span before checks are gone. I personally like the online payment system. But for those who do not accept that type of payment I still have a checkbook.

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Churches still appreciate receiving checks in the collection plate; cash is also acceptable. Members may be able to use direct bank/credit card pay, but not worth setup hassle for one-time visitors and tourists.

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I love autopay through my bank or checking account. However, I do write one check a month to my landlord only because he doesn’t do autopay. I do pay cash at restaurants as I don’t like letting my card out of my sight, and just possibly letting some lowlife stealing my identity.

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    I pay for gas by cash also to avoid those sneaky little devices popping up at gas stations, & I write about 10 checks a month. Because when I pay online I forget to deduct from my checking acct. oops!

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The sooner we ditch paper checks the sooner the hackers will be able to completely focus their devious efforts on breaking into online financial systems in order to acquire the same info. Anyone who believes that making this changeover will make our identity harder to steal is kidding themselves because, as most IT professionals will say or admit, it isn’t a matter of if, it’s when. Hackers cracked one of the most secure systems on the planet, the main NSA data base, any questions…

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Having worked at a bank for over 40 years, if the person has not signed the check it is not a legal draw on the bank so you have a legal right to not loose the funds. You can be safe using checks. We do and will continue to pay our bill by check.

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    In Great Britain and Northern Ireland, Dale’s answer is correct even if the person who has not signed the cheque has never worked at a bank. I find it surprising that any of the United States should have legislated to provide banks with an indemnity if they make a payment without the customer’s authority (unless the customer has been negligent). Moreover, in this part of the world, banks have for a long time issued cheque-books with the cheque forms already crossed. This requires that the cheque be paid into an account rather than cashed at the bank. More recently, some have added the word “only” at the end of the line to bear the payee’s name, thereby placing the onus on the paying, rather than the presenting, bank to ensure that the money is paid to the named payee. Others merely add “account payee”, leaving the burden, more logically from the banks’ point of view, with the presenting bank. Some years ago there was a move amongst the British banks to end the use of cheques, but it was abandoned as impracticable.

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When you pay bills through your bank’s online bill pay system, aren’t you giving the recipient company (mortgage lender, utility, etc.) access to your bank account information? Or, is that only a danger if you set up auto bill pay with the company? I don’t want to give anyone automatic access to my credit union accounts. Thanks.

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    —> When you pay bills through your bank’s online bill pay system, aren’t you giving the recipient company (mortgage lender, utility, etc.) access to your bank account information?

    Most of the time, the answer is “No.”

    On a direct electronic payment, the recipient never sees your bank account numbers. The payment simply appears as a deposit in the recipient’s bank account. You can verify that if you receive electronic payments, such as Social Security, payroll direct deposits, or anything similar. You never see the bank account information of the person who paid you. On one direct deposit I receive every month, I don’t even see the name of the bank that sent the money electronically.

    There is one exception: not all companies accept direct electronic payments. When paying a person or a company that does not accept direct electronic payment, your bank has to print a check and mail it in the old fashioned method.

    In that case, your bank may have printed your bank account numbers on the check or they may have printed the numbers from an internal account at the bank that is used only for outgoing payments. You would have to ask your bank which method they use (and I bet the clerk behind the counter doesn’t know). Another method would be to send a payment to someone you know and then ask him or her to tell you what was shown on the paper check they received.

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I have had my credit card info. stolen and used many times. I have NEVER had my check info. stolen. So that tells me which is safer.

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My kids are not going to give me their Checking acct number to deposit funds, its like asking for their SS#….falls into the wrong hands if someone steals our mail or emails -How safe can that be?

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    In Australia, the only information needed to deposit money into an account is on the MICR line shown on the cheque above, so anyone you write a cheque to will have that information. I no longer have a cheque account, and pay all major bills online or by credit card. When I lived in the US 30 years ago I was amazed how widely cheques were used, even for small transactions. At work we sell worldwide to businesses and universities, and the only customers who still pay by cheque are in the US.

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Jesper Beenfeldt Nielsen February 4, 2017 at 8:17 am

In Denmark all banks have closed down the use of checks from January 1st, 2017. Almost nobody used them because the banks has developed easy and cheap electronic systems.

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I volunteer at a small local non-profit. We receive over 100 checks a month. During fund raising drives we will sometimes deposit over 90 checks in a single day. Checks going away anytime soon. I don’t think so !
We do take credit cards as well, but it is used very little.

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Many small businesses accept only cash or checks because they don’t want to pay fees. My hairdresser, for example, does not accept credit cards. Is there an alternative way for very small businesses, let’s say a consultant who has only a few customers, to have a system for collecting money that does not require either party to pay a fee?

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    —> Is there an alternative way for very small businesses, let’s say a consultant who has only a few customers, to have a system for collecting money that does not require either party to pay a fee?

    There are several proposed methods and even one or two methods already available but I do not know of any that are in widespread use. Bitcoins have that capability but most people are not yet even aware of the advantages of Bitcoins. Very few businesses accept Bitcoins today although the number is (slowly) growing. Bitcoin uses peer-to-peer technology to operate with no central authority or banks and, therefore, has no fees. See https://bitcoin.org/en/ for details.

    Other methods of making payments with no fees or very small fees are generally referred to as “micropayments.” Again, several methods have been proposed but none are in widespread use as of yet. You can read more in Wikipedia at https://en.wikipedia.org/wiki/Micropayment

    In the meantime, VISA/MasterCard/Discover Card/American Express/PayPal have a near monopoly and typically charge 2% to 3% of the transaction amount.

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We use a credit card for most purchases but checks for making donations.

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