Why checks won’t be abolished
In the latest issue of the Atlantic, I have a short piece under the headline “The End of the Checkbook” — something which can’t come quickly enough, at least for me. The video above is a bit of fun, and the result could be easily tweaked just by changing the distance I walked to the ATM, but the fact is that even supposedly easy things, like depositing a check by taking a photo of it, are in reality quite hard and full of frustrations.
The time in the video is absolutely the minimum amount of time needed: it was done over a very fast wifi connection, in a well-lighted room, with all the necessaries, including a pen and my ATM card, to hand. A few days later I tried to deposit a couple of checks when I was at home, and the process took me a good ten minutes, partly because it was nighttime and therefore shadows kept on falling over the checks when I tried to photograph them. “Can’t read check. Please retake photo.”
I never write checks, but I still receive them with some regularity, nearly always in the mail. When the check is for a lot of money, I’m always a little bit astonished that people are still entrusting such large sums to the US Postal Service. And it’s not just the post office which can lose checks, either. I don’t open every single piece of mail I receive, and sometimes a letter which looks like junk turns out to have a check in it. Other times, a check is attached to the bottom of some long letter, after a perforation, and it doesn’t always look like a check at first glance. And then, once you receive the check, you have to remember to deposit it, rather than having it slowly drown in a to-do pile of paper somewhere.
All in all, I’m quite sure that over the 15 years I’ve been in the States, I’ve somehow failed to deposit at least a few checks along the way, and that most of the time it’s been entirely my own fault. It’s an incredibly anachronistic system, though, and I don’t really see why there’s such an onus on me to open my mail and recognize the check and successfully deposit the check. All of those things are easy enough that we get them right 99% of the time, but even at 99% accuracy we’re still talking about 3% of checks going undeposited. And no one would dream, today, of regularly using a payments system with a 3% failure rate.
But this is a collective action problem: it can’t be solved by any single bank, and the solution really needs to be imposed by an activist Federal Reserve. Which, sadly, has a laissez-faire attitude towards payments systems, and generally thinks it shouldn’t get involved. As a result, Americans are going to be living in a second-best world of physical checks for decades to come. We deserve better, and we’re not going to get it.