Checks: An Homage to the Memo Field
We’re sharing an interesting — and obviously Canadian — ode to “cheques” today. We’ll even maintain the north-of-the-border spelling.
Do you know what is common between U.S. and Canadian companies? Both still write lots of checks! See what the Financial Post shares as a bit of esoteric insight:
Why do many Canadian businesses insist on using cheques? Inertia must play a part, but there are also practical considerations. Some still pay by cheque because it gives the owner a sense of control. Signing cheques personally means they know what funds are flowing out of the business.
Cheques also help companies document payments in ways other mechanisms don’t, Jan Pilbauer [executive director of modernization and CIO at Payments Canada] says. “There is a memo field, in which you can write what the cheque is for,” he says. “It’s why we feel more businesses are still using cheques.” That memo field is something a forthcoming revamp to the Canadian payments system could mimic, effectively building in the ability to describe payments electronically.
Also, there is this less esoteric advantage in having a memo field:
….(I)n the U.S., the cheque’s memo field is more than just a place for writing personal reminders. According to the law in certain states, when you disagree with your creditor about how much is owed—say the contractor who is building your deck has spent too much on materials—by writing out a cheque for less than the agreed amount and including “paid in full” in the memo line, the debt is extinguished the moment the contractor cashes it.
A few things that are hard to dispute: checks are easily traceable, often cost less to process, can be cashed without a bank account, have the ability to be post-dated to suit the needs of the payer and payee, and offer a day or two cushion from payment to actual fund extraction. There is more, but you know them…
Even tech-hungry millennials still use them, making it just good sense for financial institutions to modernize their check processing capabilities and embrace the AI and new technology focus on this payment vehicle, which lives on into the future!
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