Industries and Paper Checks

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Industries Issuing the Most Paper Checks

The industries/business sectors in the US that pay with paper checks the most are law firms (93%), the insurance industry (61%), and the fleet industry (55%).


TOP 3 INDUSTRIES/BUSINESS SECTORS THAT ISSUE THE MOST PAPER CHECKS EACH YEAR

LAW FIRMS
  • Approximate Annual Paper Check Usage: 93%
  • Why they continue to use paper checks: Law firms continue to use checks for corporate disbursements as it is a legal method for keeping a track record of payments.
  • Law firms like to avoid regulatory vagaries with other payment methods so they prefer checks as a reliable payment method.
  • Approximate Annual Paper Check Usage: 61%
  • Why they continue to use paper checks: The insurance industry continues to use paper checks as it allows the company to maintain its records.
  • They also prefer checks as they want to avoid the processing fees that come with digital payments.
  • Approximate Annual Paper Check Usage: 55%
  • Why they continue to use paper checks: The fleet industry continues to use paper checks as they prefer traditional forms of payments over electronic payments.
  • Small businesses like fleet industries use paper checks because it offers a few extra days of liquidity for them.


ADDITIONAL FINDINGS

  • About 44% of payments are made through paper checks in the healthcare industry.
  • About 42% of payments are made through paper checks in the real estate rental industry.


RESEARCH STRATEGY:

  • To find information on the industries or business sectors that issue the most paper checks each year, we started to look for payment industry reports from the US on sites like McKinsey, IBISWorld, and MarketsandMarkets, among others. However, this strategy did not work. At most, we found a global payments report which provided information on revenue transactions and growth across different sectors globally. We had thought that this strategy may work as market research sites conduct research on various topics and would have published information on this topic with a US scope.
  • Our next strategy was to look for information on government websites in the US, such as the Federal Reserve. This strategy did not work as the report did not mention any top industries using the different modes of payments for their transactions. Instead, we found information on the growth rates of various transaction modes like checks, credit cards, and ATMs. We thought this strategy may work as the Federal Reserve System is the central banking system of the United States and may have published information on paper check usage in their research reports.
  • We then looked for media articles published on the banking system in the United States. We looked for information on sites like AmericanBanker, BusinessInsider, and the Wall Street Journal, among others. This strategy did not work as the articles we found provided information on how business are using different modes of transactions and consumers' preference for various payment methods. We thought this strategy might be effective because media sites publish data and interviews with leaders in the payment industry. In other cases, they publish information from third-party research covering the financial services industry.
  • At last resort, we thought to triangulate the information on industries issuing paper checks by usage. We looked for articles on sites that focus on payment-based financial services and found different industries individually and the percentage of usage and ranked them as the top industries.
HOW WE RANKED THE TOP PLAYERS
  • The articles we found provided information on various industries and the amount of check usage made by them.
  • Below are the industries/businesses with the highest usage of paper checks:
    • Insurance industry: 61%
    • Healthcare industry: 44%
    • Fleet industry: 55%
    • Law Firms: 93%
    • Real Estate Rental Industry: 42%
  • We then arranged this data set by the highest percentage, finding that law firms (93%), the insurance industry (61%), and the fleet industry (55%) issue the most paper checks.
  • The healthcare industry ranks fourth with 44% paper check usage.
  • The real estate rental industry ranks fifth with 42% paper check usage.
Sources
Sources