Troublesome to pay by check

Do you realize how much trouble is taken to make a payment by check? You have to write the words and amount, the name of payee, the date and cross the check. You should also have a covering letter or write the details of the payment at the back of the check. You should also write the address of the payee on the envelope, put a stamp and mail the check.

If you factor the cost of the time taken by the admin staff to handle the payment, it could easily amount to $5 to $10. The party that receives the cheque also has to do a lot of work to clear the check. If they are automated, the cost may be lower, but still quite significant.

You should not make any small mistake as the bank will happily bounced your check, and you have to incur the cost all over again. The bank may even impose a hefty penalty on you for the rejected check. See the photo before for the work that is required to pay the check and to make sure that there is no mistake.

It is inefficient and costly for small businesses to make and receive payments by checks - but they do not have any alternative! I have urged our banks in Singapore to introduce an electronic payment system which includes a notification service. 

My letter on this matter was published in Today newspaper and reprinted in this blog. I have also written to two banks, to the IDA and the Association of Banks on this matter. I hope that more people will come forward to express their support.