Expect Checks to Stick Around

Checks won't be bounced out of the forms business anytime soon.

Talk to anyone in the forms industry about the fate of the check business and two main issues will undoubtedly dominate the conversation: online banking and Check 21. Ever since the dawn of online transactions, the demand for personal check orders has been declining. And, ever since the passage of last fall's Check 21 regulations, there has been some conflict as to whether a manufacturer's security features pass muster. Despite these looming issues, there is a silver lining.

"The real story about checks is that the paper document is going to be around for a long time because there is always a threat of identity theft and fraud with online business," said Karen Gregg, vice president of sales and marketing for Independent Ink, Gardena, Calif. "People still want an audit trail. Checks are secure and simple, and a lot of people and businesses like that."

Dick Gray, president of Laguna Hills, California-based Xtension Technologies agreed. "All of the reports that I've seen indicate that business check printing will continue at a slight increase through 2012," he said. "While some businesses are doing online banking, many have had problems with it because no one has been able to secure the process."

Checks, on the other hand, do provide security. The trick to success, however, is to better understand Check 21, and to stand up to banking institutions requiring that checks meet specifications not actually mandated by the newly passed law, added Gray.

Know the Law

According to Gray, banks spend approximately $45 million a year to process checks, which is why they lobbied for Check 21. The new act allows banks to transmit electronic copies of checks and destroy the originals instead of shipping them. While the legislation went into effect last fall, many banks will need approximately five years to fully implement the new system.