Despite digital advancements, paper checks are here to stay for small businesses, says BillGO’s CEO.
- Small businesses in the U.S. still rely heavily on paper checks, with over 90% using them.
- BillGO’s CEO predicts that checks will remain prevalent for at least another 20 years.
- Small businesses receive $6 trillion annually in paper-check payments.
- BillGO helps convert paper checks into digital payments, reducing waiting times from 10 days to 1 day.
- 95% of small businesses prefer virtual cards over ACH for payments due to trust and ease of reconciliation.
In the world of small businesses in the U.S., from solo practitioners to landscapers, paper checks are far from obsolete. Each year, these businesses handle trillions of dollars in payments via checks sent through the postal system. Contrary to the belief that digital wallets and instant payment systems are taking over, a recent report from the Association for Financial Professionals reveals that over 90% of small businesses still use paper checks. Dan Holt, co-founder and CEO of BillGO, a startup focused on improving cash flow for small businesses, emphasizes that many are not ready to transition away from checks. He notes that approximately 33 million small businesses in the U.S. receive around $6 trillion annually in paper-check payments. BillGO, based in Fort Collins, Colorado, has raised about $187 million since its inception and serves 75,000 customers through its payment network, BillGO Exchange. This platform integrates with banking systems and software like QuickBooks to streamline payment processing, reducing the average waiting time for payments from 10 days to just one. Holt highlights that cash flow is the primary reason businesses sign up for BillGO’s services. He also points out that nearly every small business they’ve contacted has experienced issues like check fraud or insufficient funds. Holt predicts that checks will continue to be a significant payment method for at least the next two decades. The complexity of the U.S. banking system, with its 10,000 banks and credit unions, complicates the transition to digital payments. Interestingly, Holt notes that 95% of small businesses prefer virtual cards over ACH payments, citing greater trust in card networks and the ease of reconciliation. While the government is pushing for digital payments, Holt remains skeptical about the speed of this transition, emphasizing that the market for checks is still vast and largely untapped.·
Factuality Level: 6
Factuality Justification: The article provides a mix of factual information about the use of paper checks and the services offered by BillGO, but it also includes personal opinions and anecdotal evidence from Dan Holt that may not be universally accepted. While it presents some relevant statistics, the reliance on a single source and the subjective nature of some claims detracts from its overall factuality.·
Noise Level: 6
Noise Justification: The article provides relevant information about the use of paper checks among small businesses and discusses the challenges and opportunities in transitioning to digital payments. However, it lacks a deeper analysis of the long-term implications and does not hold powerful entities accountable. While it presents some data and insights, it primarily focuses on the perspective of a single company without exploring broader systemic issues.·
Financial Relevance: Yes
Financial Markets Impacted: No
Financial Rating Justification: The article discusses the continued use of paper checks by small businesses in the United States and how they handle trillions of dollars in payments through this method. It also mentions a startup, BillGO, which helps convert incoming paper checks into digital payments to improve cash flow for these companies. The article does not directly impact financial markets or specific companies.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: The article discusses the use of paper checks among small businesses and the challenges they face, but it does not mention any extreme event that occurred in the last 48 hours.·
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