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Every day you open the paper or get on the web, there’s a new headline touting the prevalence of the “next big thing” in payments:

One day it’s cash.

The next day it’s mobile payments.

The next it’s pre-paid.

And even though all signs (and much of the media coverage dedicated to the subject) say that checks are on the decline, judging from the number of checks your accounts receivable team processes in any given week, you’d be glad if what everyone said was actually true. It’d certainly make your life much easier.

As long as your customers pay by check, you’ll need to continue processing those checks to ensure your business stays afloat.

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For whatever reason, be it the industry in which your business resides or something less tangible like demographic or geographic factors, your customers still prefer to pay by check.

And as long as they continue to pay by check, you’ll need to continue processing those checks to ensure your business stays afloat.

That said, the writing is on the wall.  Although you still process a lot of checks, it’s nowhere near the number that you used to, making economy of scale difficult to achieve.

On top of that, you still need to upgrade technology every so often (Check21, ACH, etc.).  So, a process that used to be a cash cow for your business no longer produces milk, which makes you wonder if perhaps it’s time to think about outsourcing the remittance processing function.

The Ever-Increasing Cost of Processing

While the average value of each check has grown from $1,291 in 2009 to $1,420 in 2012, the actual number of checks written has continued on a downward trend during the same time period, shedding 9.2% of check volume per year.  You can’t talk about the decline of checks without mentioning why people aren’t using them anymore. In general, people are using card-based payment systems at increasingly growing rates. Debit card use continues to grow, as does credit cards and other forms of non-cash, electronic-based payments.

Customers also increasingly like the convenience of online bill pay — an option that provides savings in time and hassle, as well as savings when it comes to the also ever-increasing cost of postage. Admit it — how often do you find yourself looking forward to a trip to the post office?

And when you consider the high cost of equipment changeover as technology evolves, it’s difficult to justify sinking more money into an in-house remittance process that is more complex each day and more expensive too as those classic economies of scale shrink away.

Whether you’d like to admit it or not, checks are on the decline. As the payments landscape evolves, it may become difficult to justify an in-house remittance department to process a reduced volume of physical payment instruments.

Maybe it’s time to start thinking about outsourcing remittance services at your company.

To learn more about First Data Remittance Services, please submit your questions and comments today.