Why Are Cheques and Cash Widely Used in the USA?

For years, cash and checks have been the preferred methods of payment in many parts of the United States. Despite the rapid advancement and widespread adoption of digital payment methods, these traditional payment systems persist. This article delves into the reasons behind this persistence and dispels the myth that there are incompatible banking systems on the East and West Coasts of the USA.

Comfort and Tradition

The most common reason for the continued use of cash and checks is simply that many people are comfortable with these methods. Tradition and habit play a significant role in the persistence of such payment systems. People have relied on cash and checks for decades, and they have developed a sense of trust and comfort with the familiarity of these payment methods.

Additionally, many older individuals may not own cell phones or digital wallets, making it challenging for them to transition to digital payment systems. As a result, cash and checks remain the preferred methods for these groups.

Financial Resources and Small Business

A key factor in the continued use of cash and checks is the financial resources available to small businesses. Many small businesses, especially in rural areas, lack the financial resources to connect to electronic payment systems. Additionally, they may charge customers a fee for payment processing, making check payments a more cost-effective option for both the business and the customer.

Small businesses often prefer the stability and predictability of cash and checks. These methods allow them to better manage their cash flow and avoid the potential risks associated with electronic payments, such as fraud and payment delays.

Security Concerns

Another significant factor is the perceived safety of internet and online banking. Many individuals and businesses believe that online banking and digital payment systems are not as secure as they claim to be. This perception can lead to a reluctance to switch to digital payment methods, even if they offer convenience and reduced transaction fees.

There are cases where online payment systems have been involved in fraud, such as the example of Moneygrams mentioned. Moneygrams are notorious for their non-refundable money orders and lack of transparency in fraud prevention measures. For instance, a Moneygram location may charge up to $18 for a photocopy of a money order stolen by a fraudster, leaving the customer with no recourse.

Examples and Personal Experiences

Personal experiences also contribute to the continued use of cash and checks. For example, my landlady in New York only accepted checks, and my daughter only takes cash. These situations highlight the persistence of traditional payment methods in specific industries and locations.

Moreover, some people, such as plumbers or other service providers, charge a fee for accepting digital payments, making checks more attractive for these customers. Similarly, certain stores in rural areas still accept only checks and cash due to high fees for accepting card payments.

From my personal experience living in nine states, I have rarely used cash or checks, except in a country like Iceland where the same system is used. This observation further dispels the myth of incompatible banking systems on the East and West Coasts.

In conclusion, the continued use of checks and cash in the USA is largely due to habit, comfort, financial resources of small businesses, and security concerns. The myth of incompatible banking systems on the East and West Coasts is simply a misconception. As technology advances, it is likely that more individuals and businesses will transition to digital payment methods, but traditional payment methods will continue to play a significant role in the meantime.