Checks as a Form of Payment
Checks have long been a familiar feature of our financial lives. Checks, (or cheques as this term is still written in England and Canada), have been around for thousands of years. According to historians the citizens of ancient Greece checks were the first to introduce checks. From the 1600’s checks became an increasingly popular means of payment in European countries. By the closing decade of the twentieth century they had become the most popular means of payments.
Checks prove that the basic concept of personal and business payments has remained unchanged. The check remains a kind of promissory note. Mr. Smith gives Mr. Jones a check for $100 and Mr. Jones knows that he can present it at Mr. Smith’s bank and receive the cash equivalent of the check from Mr. Smith’s account. More likely than presenting the check personally, Mr. Jones will deposit the check in their own bank and Mr. Jones’s bank and Mr. Smith’s banks sort out between them the transfer of funds between their two customer’s accounts. The check writer’s account is debited while the receiver of the check is credited the amount in his or her account. Note that a bank account without less money than the amount of the check will cause the check to bounce. Payment will not be credited to the recipient and a processing fee may also be charged.
The simplicity of the concept is one of the reasons that checks have been around so many years. The standard check format has also proved its durability with checks issued 350 years ago still having the sum written out in words and numbers and the signature we would recognize from modern-day checks. Using a check is so much more convenient that carrying around a large amount of cash to make purchases. Also, the ability to keep track of checks and trace transactions has been of great benefit to both those who issue the checks and those who receive them.
Checking out the story of checks in the last decade and a half reveals that checks have been seriously declining in popularity. Today credit and debit cards are much more frequently used, and people are speculating if checks are on their way to join gold coins in the museums of commerce. The advantages of plastic card transactions are winning over increasing numbers of consumers, and with the rapid growth of online shopping, booking and gaming services, it looks like the trend away from checks is set to continue.
For more infomation on payment methods choose from the list below. |
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Banking - Business Finances - Economics - Insurance - Investing
Major Purchases - Personal Finances - Stock Market - Taxes
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