Paper Check vs. Electronic Payment: Which Is the Right Choice?

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The home buying process is filled with a series of hurdles buyers must clear before they get the keys to their new house. Once they’ve found their dream home and have been approved for a mortgage, they need to successfully complete one last step before they can move in: paying the closing costs. And since you’re the real estate expert, they’ll likely look to you for advice on what payment method to use. In most cases, the choices boil down to paper check vs. electronic payment. If you’re not sure which one to recommend, take a look at the pros and cons of each.

Paper Check Advantages

Paper checks have been around for decades, so your clients are likely familiar with them already. They’re basically the old standby when it comes to payment options. Granted, they’re becoming less popular with time, as experts say the number of checks being written is dropping by about 1.8 billion per year, which could make them obsolete by 2026! Regardless, they’re still a valid form of payment in real estate for now, as they do have some advantages.

You Get Some Extra Time

For many people, the main benefit of writing a check is that it’s not quite an instant payment. When you pay cash, you have to have that money the second you hand it over, and there’s no chance to cancel it if you think you’ve made a mistake with your purchase. With a check, you typically have anywhere from one to a few days before the recipient cashes it and money is taken from your account. This can give you time to add money to your bank account if necessary — or cancel the check if you change your mind. This is why some people prefer this option when comparing a paper check vs. electronic payment for real estate transactions.

You Can Pay in Advance

When you use a paper check, you often have the option of postdating it. This means you can hand off the check before the payment is actually due, but the recipient can’t cash it until the date you put on the check. While some businesses don’t allow people to postdate checks, the ones that do make it easy on people to submit their payment any time, even if they don’t have the money in their account yet.

Paper Check Disadvantages

Of course, there are some cons to balance out the pros of paper checks when it comes to real estate transactions. And some of them are a big enough deal to cause paper checks to continue to drop in popularity in recent years. Take a look at some of the disadvantages of paper checks.

They Take Time to Send or Receive

The fact is that paper checks require some time before they’re transformed into money for the recipient. Even if you hand someone a paper check in person, that person then has to put it in the bank and wait a few days for it to clear. In fact, it usually takes at least two business days for a check to clear so the full amount is available. In many cases, it takes longer. And then if you have to mail a check, it will take a few more days for the recipient to get it — not to mention the time it takes to prepare it before you drop it in the mail. Basically, the main disadvantage of paper checks is the extra time they require before they translate into cash, which could be a problem when you’re paying for real estate costs considering the many tight deadlines involved in the process.

They Could Bounce

Remember how one advantage of a check is that you don’t have to have the money in your account at the moment you write it? Some people take this a bit too far and wait days to put the money in their account, or they simply never do it. That leads to a bounced check, which requires the check writer to pay fees on top of facing the embarrassment of writing a bad check. And in real estate transactions, bounced checks may have even worse consequences, like canceling the contract so the home buyer misses out on their dream home!

There Could Be Security Issues

Another consideration to make when comparing paper check vs. electronic payment is security. When you put a check in the mail, there’s a chance it could get lost so the recipient never receives it. Even worse, it could get stolen by someone who knows how to wash and rewrite the check to themselves, in which case you lose the money. This can add up to thousands of dollars lost when you’re paying for real estate costs. Then there’s the fact that checks display a lot of personal information, such as name, address, and bank account numbers, which could lead to identity theft. This is why many people feel that paper checks aren’t a secure way to pay.

Electronic Payment Advantages

Comparing a paper check vs. electronic payment requires you to look at the pros and cons of each option. The electronic payment has its own benefits that appeal to many people, such as the following.

It’s Fast

Paying electronically is a quick process. When you use the right payment platform, it should only take seconds to press a button to submit payment, and it typically takes anywhere from hours to one business day for someone to receive the funds. So when you need to submit or receive payment fast, electronic payment is the right choice.

It’s Secure

Electronic payments are also considered the most secure option. There’s no chance of the payment getting lost in the mail like with paper checks. And unlike with checks, the recipient of the payment won’t see your personal information. Any sensitive information gets encrypted for ultimate protection so you don’t have to worry so much about your money or identity being stolen when you’re buying a house.

It’s Simple

When you pay electronically, you typically only have to click on a button or two and maybe check a couple of boxes to be sure you’re sending the right amount to the right recipient. This takes less than a minute and is considered easier than writing and mailing a check, which is why it appeals to people who are comparing the paper check vs. electronic payment for real estate transactions.

Electronic Payment Disadvantages

As with all payment methods, there are some drawbacks to electronic payments. They include the following.

You Have to Trust Technology

Some buyers may prefer writing a check rather than paying electronically simply because they’re not sure how the payment process works when it comes to technology. In fact, one of the reasons that paper checks still exist at all is that some people don’t entirely trust electronic payments yet. This means you may have to reassure your clients that electronic payments are secure and effective if you want them to use them. Showing them the payment platform your office uses–and letting them see how easy it is to track their payment–can help them feel more comfortable with this process.

There Are No Delays

While the speed of electronic payments is a plus for most people — especially recipients — it may be a downside for some. Those who like the idea of paying a day or two before they actually have the money in their account might not like that an electronic payment will take their money out faster than a check would.

As you can see, there are some important pros and cons to consider when it comes to the paper check vs. electronic payment decision. But in general, there’s a reason — actually several! — that paper checks are becoming less popular every year, while electronic payment options continue to soar. is a secure, fast, digital way your clients can send money for real estate transactions. To learn more about, schedule a demo today!