by Matt Rej
Paper checks may seem like the safest and least expensive way for B2Bs to get paid. There’s no percentage-based processing fee, and for a $10,000, $25,000, or $100,000 invoice, avoiding credit card fees can create meaningful savings.
But accepting checks comes with risks and other costs that are easy to overlook.
If you’re a B2B merchant that still accepts a large volume of checks, keep reading to see if the risk is actually worth any perceived cost savings.
Check Fraud is Still a Widespread Issue
According to the 2026 AFP Payment Fraud and Control survey, 58% of organizations experienced check fraud in 2025. This figure includes both successful and attempted cases of check fraud.
A separate study conducted by PYMNTS and The Clearing House found that 63% of companies report check fraud.
But here’s where things get interesting. That same study from PYMNTS found just a 2% fraud rate for real-time payments (RTP) and FedNOW payments.
Now I think these numbers deserve some context. The AFP survey also covers payments fraud more broadly, including checks written by an organization. So we can’t automatically say that checks are 40x riskier than instant payment methods. Checks are also used significantly more than real-time payments, which gives fraudsters more opportunity to target them.
But merchants accepting checks are still vulnerable. Incoming checks can be:
- Counterfeit
- Altered
- Written against insufficient funds
- Deposited more than once
- Tied to a payment scam
And seeing funds appear in your bank account doesn’t automatically prove the check is valid. The FTC requires banks to make deposited funds available quickly, while it could take weeks for a fake check to be identified.
This is Primarily a B2B Problem
To be clear, this problem isn’t equally applicable to every merchant.
For restaurants, retailers, or standard ecommerce businesses that process nearly every checkout through a POS or online checkout, the occasional paper check isn’t something that you should be concerned about.
Check acceptance is much more common among (mostly B2B) merchants that bill customers through an accounts receivable process, including:
- Manufacturers and distributors
- Contractors and construction companies
- Professional service firms
- Medical and dental practices
- Insurance and financial service providers
- Wholesalers
- Equipment suppliers
- Software and technology vendors
- Businesses receiving high-value invoice payments
Checks still account for 26% of B2B payments. While that number has plummeted from 81% back in 2004. So while check usage is obviously declining, they still represent roughly one out of every four B2B payments.
And if you’re receiving hundreds or thousands of checks each month, fraud risk is only part of your problem. Paper checks create delays, manual posting requirements, reconciliation work, and uncertainty about when funds are truly collected.
Why Merchants Continue Accepting Checks
The most obvious reason is cost.
Merchants can accept a $50,000 check without paying interchange, card-brand assessments, or a processor markup based on the transaction amount. Accepting that same payment through a commercial credit card could easily cost $1,000.
Additionally, checks are just part of how many B2B buyers and sellers have operated for years.
Your customers may have an established accounts payable process built around checks. Other customers may be unwilling to provide their bank information for ACH transfers. So refusing checks could create delays or unnecessary friction with a long-term account that represents significant revenue.
I’ve even spoken to merchants who view checks as less risky because they don’t create traditional chargebacks.
But that doesn’t make checks risk-free. And as I’ll cover shortly, they aren’t always as cheap as you might think.
Why Checks Are So Vulnerable to Fraud
A legitimate business check contains sensitive information that criminals reuse, including the payer’s name, address, bank routing number, account number, signature, and check number.
Paper checks can be stolen, copied, used to create counterfeits, or fraudulently signed before deposits.
And incoming checks create additional risks for the merchants accepting them, too.
Fraudsters may send a counterfeit check for more than the amount owed, and then ask you to refund the difference through a wire transfer or irreversible method. The merchant sees money in its available balance, sends the refund, and later learns the original check was fake.
It’s also possible for a check you’ve accepted remotely to be attempted for physical check deposit elsewhere.
Even legitimate checks can be returned for insufficient funds, closed accounts, stop-payment orders, or other reasons.
And unlike a declined card transaction, the merchant probably won’t learn about the problem at the point of sale. By the time the check is returned, the product may have shipped or the service may already be complete.
Checks Aren’t Always the Cheapest Option
At face value, checks have a significantly lower cost of acceptance compared to commercial credit cards. You may be $0.50 at most to deposit a check, whereas your credit card merchant fees fall in the 2-3% range.
But that $0.50 doesn’t account for:
- Employee time spent opening and sorting mail
- Remote deposit or lockbox services
- Trips to the bank
- Manual invoice matching
- Data entry and reconciliation
- Collection attempts
- Fraud investigations and losses
That last bullet may be the most expensive of all, and a single instance of it on a large check amount could easily offset any savings compared to taking a commercial credit card.
Some of these costs may not matter to a merchant that just receives ten paper checks each month, as matching the check to the invoice is straightforward. But it’s much more significant at scale, where you need to manually match and reconcile thousands of paper checks every month.
It’s also worth noting that delayed access to your funds can be costly.
If your average accounts receivable collection cycle on a paper check is 60 days, how much would you be willing to pay to see an extra $100k or $200k in your account in just a few days?
Faster access to your money is valuable, and may be worth the added processing costs. Yet many businesses still view electronic payment methods as riskier than checks, even when the latest available fraud data suggests otherwise.
The Fear of New Payment Methods is Bigger Than the Actual Risk
Despite all of these risks, many businesses are still more concerned about newer electronic payment methods than paper checks.
The PYMNTS study we cited earlier found that 85% of US payment professionals expect fraud to increase as instant payments become more widely available. Yet just 2% of companies currently report fraud involving RTP or FedNow (vs. 63% reporting check fraud).
So there’s a serious gap between perception and reality here.
That doesn’t mean that real-time payments are risk-free. But the data doesn’t support checks as the safer option.
Businesses just continue to write checks and accept checks because it’s what they’ve been doing for so long. Something being familiar is not the same as it being safe.
So should every merchant should instantly replace paper checks with RTP or FedNow? Not necessarily.
But businesses should not assume that newer payment options are riskier, when in fact, the newer technology is inherently safer (and the data agrees).
What Merchants Can Accept Instead of Checks
There is no single best replacement that works for every business. The best option for you depends on factors like the transaction amount, customer relationship, cost of acceptance, speed, fraud controls, and how your customers prefer to pay.
But here are the alternatives to paper checks that you should be considering:
ACH — This is the most practical alternative for most B2B invoices. ACH typically costs significantly less than commercial cards and works well for established customers, recurring payments, and predictable invoice amounts. Settlement isn’t instant, but most merchants don’t need every payment to arrive in seconds.
RTP or FedNow — Real-time payments make more sense when you need immediate confirmation of the payment and instant access to funds. This could include a large deposit needed before work begins, a past-due invoice, or payment required to release an order. Availability depends on the banks involved, so it’s not guaranteed you’ll be able to do this on every transaction (as your customer’s bank matters too).
Commercial Credit Cards — Credit cards are more expensive than ACH, but many B2B customers prefer them for working capital, rewards, procurement controls, and easier expense reporting. Merchants that accept commercial cards should make sure eligible transactions qualify for programs like Visa CEDP or large ticket options that qualify for lower interchange rates.
Virtual Cards — This is a subset of the commercial card category that gives the customer a unique card number that can be restricted to a specific invoice, merchant amount, or time period.
How Merchants Can Move Away From Check Acceptance
You don’t need to stop accepting checks overnight.
Start with the customers creating the most check volume, manual work, or payment delays. Your recurring customers with predictable invoices will usually be the easiest to move to ACH.
To encourage adoption:
- Add ACH and other electronic payment options to every invoice.
- Make enrollment simple through a secure portal or digital authorization form.
- Introduce electronic payments during new customer onboarding.
- See if your bank offers RTP or FedNow, as you can use it for urgent or high-value payments.
- Send digital invoices with multiple payment options, including ACH and credit card.
- Continue to accept commercial cards as needed, but make sure you optimize those transactions for lower interchange rates.
Some customers may still insist on writing paper checks. And I’m not going to be the one who tells you to alienate those customers.
Just make sure you have everything in place to match each check to a legitimate invoice, reject overpayments, and deposit funds promptly. You should never issue a refund through a different payment method either just because the funds seem to be available.
Final Thoughts
Checks may seem inexpensive because there’s no percentage-based processing fee.
But that calculation ignores other factors. Fraud exposure, manual reconciliation, delayed access to funds, and the cost of returned or counterfeit payments can be really expensive.
That doesn’t mean that every B2B customer should be pushed to the same alternative.
But there are other options out there that you can explore. Don’t let the fear of something you’re unfamiliar with stop you from changing old habits. They can actually be safer and end up saving you a lot of money.