As check use declines, the risk of fraud for every payment mailed is higher than ever.
By a B2B payments industry contributor.
The paper check seems like a thing of the past. The number of checks written in the U.S. has dropped a lot, from nearly 19 billion in 1990 to about 3.4 billion in 2022, according to Federal Reserve data reported by the Associated Press. But strangely, the risk for every check you mail is higher than ever.
While fewer checks are being sent, the dollar amount on each check is up, and criminals have noticed. Bank reports of suspected check fraud grew a shocking 94% from 2021 to 2022, according to a report from the U.S. Department of the Treasury. This trend turns a normal payment task into a major financial risk. When you handle checks yourself, printing, stuffing, mailing, and tracking, you expose your business to risks that are getting harder to manage on your own. This has led many finance teams to rethink how they do things and look into options like dedicated Smart Payables check writing and mailing services to pass on that risk and workload.
Quick answer: Businesses are hiring outside services to handle check payments to fight clever fraud plans like check washing and mail theft. Expert services offer security steps like Positive Pay, advanced tracking, and safety certifications that are hard and expensive for most companies to set up and keep running on their own.
What’s inside
- What Are the Real Costs of Printing Checks In-House?
- What Security Features Should You Look For in a Payment Service?
- What Happens to Your Payment Data After You Click ‘Submit’?
- Frequently Asked Questions
- The Bottom Line on Payment Security
What Are the Real Costs of Printing Checks In-House?
The true cost is more than just the cost of supplies and stamps. It also includes major costs from employee time and the growing financial risk from check fraud.
Most businesses can figure out the direct costs of handling payments themselves instead of using Smart Payables check mailing services. This includes special check paper with security features and special magnetic ink (called MICR toner), which costs more than regular toner. Add envelopes, postage, and special printers. These are the costs that are easy to see on an expense report, but they are only a small part of the total cost.
The bigger, often untracked cost is employee time. Your accounting staff’s time is valuable. Every minute they spend printing, signing, folding, stuffing, and mailing checks is a minute they can’t spend on more important work, like financial planning. This process also includes dealing with returned mail from bad addresses, re-sending lost checks, and answering payment questions from vendors. These tasks create a significant slowdown for your finance team.
❝ To get a clearer picture, try this exercise. Time the entire check-run process from start to finish for one week. Include everything from data entry to the post office run. Multiply that time by your team’s total hourly cost. The number is often surprisingly high.
The biggest cost, however, is the risk of fraud. While fewer checks are being written, each one is a bigger target. The average value of a check has grown to nearly four times what it was, rising to $2,652 in 2022, as reported by the Associated Press. Criminals target these high-value payments. Between February and August 2023 alone, banks filed reports tied to about $688 million in losses from check fraud schemes linked to mail theft, according to a filing published by the Federal Deposit Insurance Corporation. When you drop a check in a standard blue mailbox, you are putting your company’s bank account details at risk from this growing threat.
This type of fraud often involves “check washing.” Thieves steal mail and use common chemicals to erase the payee name and amount. Then, they rewrite the check to themselves for a much larger sum. They can deposit it with a phone app, which makes them harder to catch. The routing and account numbers printed at the bottom of your check are all a criminal needs to create fake electronic payments later. Each check you mail is basically a security risk.
What Security Features Should You Look For in a Payment Service?
You should check a service based on their written security rules, checks by outside experts, and special tools to stop fraud.
The world of payment security is complex, and one feature is never enough. The goal is to find a partner who uses several layers of protection. This is important because fraud methods are always changing. Bank reports of check, wire, and ACH fraud have climbed sharply in recent years, and this situation requires more than simple safety steps.
When comparing services, focus on these key security and compliance features:
| Feature | What It Is | Why It Matters for Your Business |
| Positive Pay | An automatic service to spot fraud. Your company sends a file of checks it has sent to your bank each day. | The bank will only pay for checks that match the details in your file (check number, amount, payee). This stops most fake or changed checks. |
| SOC 2 Type 2 Report | An outside company checks the service’s security over several months. It covers security, availability, and privacy. | This proves the service follows its security rules all the time. A Type 2 report is much stricter than a Type 1, which only checks security at one point in time. |
| CASS Certification | A certification from the USPS for a service’s software that checks addresses. | It standardizes and corrects mailing addresses. This greatly lowers the chance of returned mail and makes sure payments get to the right person. |
| HIPAA Compliance | Following the rules of a health privacy law (HIPAA). | This is vital if you are in healthcare and mail documents with private patient information (PHI), like Explanation of Benefits (EOBs). |
Besides these basics, the details of how they work matter. For example, a service’s SOC 2 report is a key piece of research. It offers a clear review from an outside expert on how they handle your private financial data. Likewise, if you handle any kind of payment card information, PCI DSS (Payment Card Industry Data Security Standard) compliance is a must-have.
❝ When checking a potential service, ask for the summary of their most recent SOC 2 Type 2 audit report. Also, ask them to describe their written plan for what to do if fraud happens. What happens when a payee says a check is lost or stolen? A clear, confident answer shows a well-planned and trustworthy system.
In the end, these features are not just names on a list. They are parts of a security system designed to protect your money and data. They move the hard work of managing security and compliance rules from your team to a specialist.
What Happens to Your Payment Data After You Click ‘Submit’?
Your payment file enters a carefully controlled, automatic process designed to limit how much people touch it and increase its safety and chances of arriving.
Once you send your payment file, the process is much more than just printing. The data, scrambled for safety during transfer, arrives at a secure facility. The first step is often checking the data. The system reads the file, looking for errors that could cause a misprint. A key part of this is address cleaning. Each address is checked against a USPS-approved database using CASS-certified software. This process standardizes addresses, corrects typos, and adds ZIP+4 codes, greatly lowering the chance of returned mail.
Next, the checked data is sent to a secure facility. This is not a typical office. It’s a secure building with limited entry, security cameras, and regular checks. High-speed printers use special Magnetic Ink Character Recognition (MICR) toner for the bank information and print the checks on high-security paper. This paper often includes features like watermarks, tiny print, and special paper that reacts to chemicals to stop someone from changing it. The entire process of printing, folding, and inserting checks into envelopes is usually done by machines. This removes the risk of an employee seeing or messing with private payment details.
❝ Ask a potential vendor to describe the security of their building. Are there cameras? Is entry logged and limited? Who can get to the check paper and MICR toner? The answer should describe a system that has many layers of security, not just a locked door.
Finally, the sealed envelopes are sorted and delivered directly to a USPS processing center, often skipping public mailboxes. This step shortens the mail delivery time and, more importantly, removes the chance for mail theft, which is a main cause of check fraud. The entire journey of your payment, from data file to the USPS, is logged and tracked. This creates a clear record that is nearly impossible to copy in a normal office.
Frequently Asked Questions
What’s the difference between a payment service and my bank’s bill pay? While both can send checks, a special payment service is built for business-to-business (B2B) payments. It usually offers features that bank bill pay doesn’t, such as strong connections to your accounting software, detailed records for every payment, and special certifications like HIPAA for handling private documents. Bank bill pay is often made for personal use or very small businesses and may not offer the same level of security.
How is pricing for outsourced check printing usually set up? Most services use a three-part pricing model. You can expect a one-time setup fee to get your account ready. After that, there is a per-item fee that covers the check paper, printing, folding, envelope, and work. Finally, you pay the actual cost of postage. The per-item fee is often based on volume, meaning the cost per check goes down as you send more payments.
Is it truly safer to outsource high-value check payments? When done with a trusted service, yes. Outsourcing moves the process from an office and public mailboxes into a secure, checked facility. A mix of sending a Positive Pay file to your bank, direct delivery to USPS centers, and a complete digital record creates many layers of protection that are very hard to copy yourself. This system is designed to reduce the specific, growing threat of mail theft and check washing.
Shouldn’t our business just switch entirely to electronic payments? While moving to electronic payments like ACH is a great goal, it is often not a complete solution. Many vendors and payees still need or prefer paper checks for different reasons. Certain payment types, like insurance payouts, legal settlements, or customer rebates, are also often sent as checks. A complete payment plan often involves managing both electronic and paper payments safely and well.
What will my vendors see when they receive a payment? Most payment services let you customize the checks and papers sent with the check with your company’s logo, so the payment is clearly from you. The return address on the envelope, however, is usually the service provider’s. This is a practical benefit, as the provider then handles any returned mail, corrects addresses, and re-sends payments for you, saving your team from that paperwork.
The Bottom Line on Payment Security
The way businesses handle paper checks hasn’t kept up with how criminals take advantage of them. While fewer checks are being sent, the value and risk of each payment have grown a lot. Continuing to treat check printing as a simple office task, done on an office printer and dropped in a public mailbox, puts your company’s most private financial data at risk from a growing and organized threat. The main issue is no longer just about saving time, but about basic security.
Judging your payment process shouldn’t be a simple price comparison. The real math must compare the clear cost of a secure service with the hidden, and possibly disastrous, cost of fraud. A single washed check can lead to losses that are much larger than years of service fees. The key question is whether your own safety steps can truly match the many layers of security of a special facility with regular checks for following the rules, automatic fraud detection, and a secure record of who handled the payment.
In the end, every payment your business sends out shows how well it protects itself. Changing your view to see sending checks as a key security task, not just simple office work, is the most important step you can take. This mindset helps you clearly see your own weaknesses and make a smart choice about how to protect your company’s money in a changing world.
About the author
Smart Payables provides services that handle payments for other companies, from startups to large businesses. Since it was founded in 2005, the company has focused on safely sending out payments, including check printing and mailing, ACH processing, and sending out tax forms. Their services are built on security and compliance, using technologies like Positive Pay and address verification to protect client money while making complex business payments simpler. Smart Payables is based in Englewood, Colorado.
