Will checks be a thing of the past?

Are checks going to be a thing of the past just like free checking? We’re seeing lots of other changes at banks including more fees for basic services. Losing checks may actually be a good thing.

For years, people have been directly depositing money in their account and paying bills online. However, how do you pay your rent? If you’re not dealing with a large company, you probably don’t pay it electronically.  Need to reimburse a friend? Do you write them a check? Now, some banks are making it easy to electronically pay friends or other casual acquaintances.

My bank offers Popmoney, but I know there are similar services out there and they all work differently. My friend in Boston needed to reimburse me for some basketball tickets, and she had the bank send me a check like the bank sends your credit card company if you bank online.

With Popmoney, there are no checks. The money is all electronically exchanged.

Popmoney makes it simple for both parties.  The individual who needs to pay you goes to their bank, if they offer the service, and authorizes an amount to send you. Then, you get an invitation to receive the money. If you’re a first time user, you sign up with your bank account number and routing number and then the money is deposited in your account. If you’re a member of a Popmoney bank, you simply log into your bank account. There is no need to know your bank and routing numbers. They’re automatically given to Popmoney.

I like it because you don’t have to give your personal account information to anyone.  You simply authorize a payment, and then enter the person’s phone number, email address, or account number / routing number where you want the money deposited. If you use the phone number or email option, that person gets a text message or email alerting them that they have money waiting for them if they complete and verify the transaction.

The idea is to make sending and receiving money as easy as sending and receiving emails and text messages.   For now, it’s still free.  Click here to see if your bank participates.  Make sure you read the fine print at your bank’s website, because while Popmoney doesn’t charge for the service, some banks are  charging a fee per transaction.  Look in the FAQ’s first, call your bank, or read the fine print. Make sure your bank is one that is not passing the cost of the service onto you before you use it.

If you still write checks, just be careful. They are not as safe as online banking. Paying bills in the digital world may seem scary, but it’s actually safer especially if you take steps to protect your digital footprint as described below. With checks, they put you at risk for identity theft. You account number and routing number are on your check.  It’s vulnerable as it passes through the mail system, then it gets opened at the company you’re paying, then it gets processed at the company.  It passes through so many hands your information is more vulnerable to wandering eyes than just paying online.

Related link you may like:
Reducing your digital footprint – private browsing online