The days of cash and paper checks are numbered. Soon enough, everyone will be favoring digital payment methods.
The transition to a cashless society is already happening. In a Pew Research Center poll from 2022, 41% of U.S. respondents said that they didn’t use cash for any of their purchases in a typical week.
This percentage almost doubled from the responses from 2015, where 24% admitted to not using cash for any purchases. Going cashless is gaining popularity, and it’s gaining quickly.
In the same vein, the days of paper checks are also declining rapidly. In place of these paper checks, people are using direct deposits. Think about how you receive your paycheck.
Is it a written check that you have to deposit at the nearest bank or ATM, or is it an electronic funds transfer that shows up in your bank account on payday?
The answer is likely to be the latter. The Getting Paid in America (2022) survey by the American Payroll Association found that 93% of respondents received their pay through direct deposits. In the meantime, less than 4% received their pay via paper check.
Why are these digital options growing in popularity? Read ahead to find out the benefits of leaving cash and paper checks behind.
The Benefits of Going Cashless
It can be easier to track your spending when you’re using cashless payments.
First, you can track your spending with the help of mobile banking apps where you can see all of your transactions through your electronic bank statements. You can do the same with your credit card statements.
Second, the top budgeting apps will sync with your bank and credit accounts so that you can get real-time updates on your spending.
This syncing feature is meant to hold you accountable to your budget’s spending guidelines and prevent you from spending beyond your means.
Fewer ATM Visits
When you go cashless, you don’t have to plan so many visits to ATMs to make withdrawals.
This means you can save yourself time and energy from finding an ATM near your location.
It can also save you from paying ATM fees, like out-of-network ATM fees and ATM operator fees.
Easy Bill Splitting
Have you ever struggled to split a restaurant bill amongst friends with cash? You didn’t have the exact change on hand, so you weren’t able to split the costs evenly and someone left the table feeling sour that they paid more than they owed.
With digital payments, splitting bills is much easier. Everyone can pay exactly what they owe without trouble. There are even bill-splitting apps designed to make this process as smooth as possible.
The Benefits of Skipping Paper Checks
No Lost Checks
When you use paper checks, you run the risk of losing them — or worse, having them stolen.
If a paper check goes missing, you will have to contact your bank and ask for a stop payment.
When you issue a stop payment, the bank agrees not to pay out the check if it gets deposited in the near future.
Stop payments come with fees. You can expect to pay between $15-$35 every time that you issue this type of request.
Stop payments also don’t last forever. They will only go into effect for a short period of time (for example, 6 months).
If you haven’t retrieved the check in that timeline, you may want to pay for another stop payment once you’ve reached the deadline.
Digital funds don’t come with this risk. If a company sends you a direct deposit, it won’t get lost on the way. It will be deposited into your bank account.
And if you send someone funds through a p2p transfer app, you can track your money to make sure that it reaches the right person. It won’t mysteriously disappear.
With direct deposits, you don’t have to worry about depositing your check via an ATM, a bank branch or even a mobile check deposit feature on your mobile banking app.
It’s much more convenient to have those funds automatically transferred and deposited without having to lift a finger.
You’ll especially appreciate the convenience of direct deposits in situations where you’re in dire need of funds.
For instance, you might apply for a loan to help you cover an emergency expense when you don’t have enough savings to do so.
If you get approved for the loan, temporary funds will get electronically transferred into your bank account, which you can use to make your urgent payment.
Find out more details of a direct deposit loan and how it differs from other borrowing options. This information could come in handy during an emergency.
Digital payments can reach you a lot faster than a mailed, paper check. For instance, you can sign up for direct deposits with the IRS to receive your tax refund.
Doing this will make it far easier to process your tax refund and you will receive it much sooner than if you requested to have your refund sent via check through the mail.
Stop living in the past and embrace digital payment methods. As you can see, they come with a lot of benefits that would make life easier.