For decades, paper checks have been a familiar tool for business payouts. They’re tangible, easy to issue, and they give companies something digital rails don’t: Float. The time between writing and cashing a check can extend a company’s liquidity, letting businesses hold onto cash longer.
But as fraud risks climb and customer expectations shift toward faster payouts, the old advantages of checks start to look less like benefits and more like liabilities. Float might seem helpful in the short term — but the hidden costs and exposure can outweigh it in the long run.
Why float feels like a benefit
On paper (literally), checks give businesses flexibility. The payout doesn’t hit until the recipient deposits the check and it clears. That lag can give finance teams breathing room, allowing cash to stay in accounts longer. For companies managing tight margins or large-volume disbursements, float can feel like a valuable lever of control.
But that same delay is a double-edged sword. It creates uncertainty, increases reconciliation effort, and exposes both sender and recipient to risks that digital payments avoid.
The fraud reality of checks
Even in 2025, checks remain the single most fraud-prone payment method in the U.S. According to the Association for Financial Professionals (AFP), 63 percent of organizations experienced check fraud attempts last year — a higher share than ACH, card, or wire combined.
More sobering statistics on check fraud:
- Over $688 million in suspicious-activity reports (SARs) tied to mail theft–related check fraud in just six months after a major alert.
- Around 30 percent of all fraud losses in 2024 stemmed from check fraud.
- Check fraud can perpetuate more fraud: 26 percent used business checks as templates to create additional counterfeit checks.
Rising postal theft has fueled a resurgence in “check washing,” where stolen checks are altered and redeposited. For businesses, this means:
- Direct financial loss if checks are altered or counterfeited. Fake checks are often unseen and unreported as recipients are not directly involved.
- Time-consuming stop payments, investigations, and reconciliations. These manual efforts are frustrating and negatively impacts your AP team’s morale.
- Damaged relationships with customers, contractors, or partners whose payments are delayed or stolen. When presented with options, these suppliers will choose a partner with the fastest and best path to payment.
The more checks you issue, the more attractive a target your business becomes.
Hidden costs outweigh float
While float can delay outflows, checks create their own costs:
- Replacement costs: Reissuing a check can run $30 to $100+ per item once you account for bank fees, staff time, and postage.
- Manual intervention: Lost or delayed checks often require stop orders, reconciliation, and hours of customer service.
- Customer experience: Waiting weeks for a payment — or dealing with a lost check — erodes trust and increases churn.
What appears to be a short-term cash management tool quickly becomes a long-term liability.
Digital payouts offer control without the risk
Modern rails, ACH, pay-by-bank, instant push-to-debit, and virtual cards, eliminate the biggest vulnerabilities of paper checks while still giving businesses control over timing. Funds can be scheduled for same-day or even instant delivery, and APIs provide visibility into when payments are initiated, settled, and received.
In other words, you don’t have to give up control to replace checks for payments. Digital payouts deliver the predictability of float, without the exposure to fraud or the drag of manual processes.
The competitive edge of moving on
In a world where partners, contractors, and consumers expect faster payments, holding onto checks isn’t just risky, it’s uncompetitive. Float may have once been a tool of smart cash management, but today the smarter move is to guarantee speed, security, and trust.
Replacing checks with digital rails reduces fraud exposure, improves cash flow visibility, and builds stronger relationships with the people you pay. That’s more than a cost saving, it’s a strategic advantage.
The bottom line
Checks might seem to buy businesses time, but in reality, they cost more in fraud risk, operational overhead, and lost goodwill than they deliver in float. Digital payouts allow companies to keep control of timing while protecting both sides of the transaction.
The message is clear: the longer you cling to checks, the more you’re gambling with fraud. You can control the flow of funds with smart, digital payouts without sacrificing yield.
