Still paying by cheque?

Despite the development of internet banking and widespread use of credit cards there is still a large number of businesses paying by cheque.

This seems to be very common within the tourism industry.

People think cheque payment is quick an inexpensive but think again:

Disadvantages to cheque drawer:

• Banks charge more for processing cheques.
• You have to track outstanding cheques in your bank account to ensure you don't become overdrawn to avoid additional bank fees.
• You have to post/deliver the cheque to the person
• Even if you are not been charged by the bank for using cheques you might be able to obtain a better deal by moving to electronic payments.
  

Disadvanates to the cheque receiver:

• There is a cost to the person you are sending the cheque to.
• They will have to pay more to bank a cheque
• The funds are not immediately available
• They have to physically visit the bank.

So what are the alternatives:

• Pay via internet banking
• Pay via credit card (or use a debit card)

Even if you incur minimal costs to process a cheque the total cost between the cheque sender and receive there is a substantial. You can be sure the receiving business understands these costs and will result in higher charges.

In a previous web hosting company we used to offer a discount of 5% for direct credit and 2% for credit cards to encourage people to move to a cheaper payment method.