Here’s Why Cheques are Still Popular Among Businesses in India

Even as the union government continues to push the digital economy in India, the classic payment methods, including cheques still bear a high significance in the commercial sector. This became apparent recently when the rumour about the government banning the cheque books created an uproar. However, the finance ministry was quick to put the speculation to an end by announcing that the government has no such plans.

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The importance of cheque books in India can be realized by the fact that in August alone, the total number of cheque transactions stood at Rs. 6,224 billion as per the RBI data. This is thrice the amount of debit card transactions and roughly 10 times of the mobile wallet transactions that took place during the same period.

It’s clear that companies and individuals still have an affinity for cheque books even in today’s growing digital economy. However, the question is “why”?

The following are the main reasons why cheque transactions are still popular:

1. Cheques are one of the oldest payment methods used by the businesses in India. At a time when digital payment methods like credit cards or net banking, etc. didn’t exist, cheques were the fastest and simplest way to transfer funds from one party to another.
2. Payment through a cheque doesn’t incur any additional charges. However, using credit cards, NEFT, etc. attract a small fee.
3. A large number of businesses don’t trust digital payments, and they are not entirely wrong to think that way. There are all kinds of cyber risks and frauds that are associated with card-based payments. Cheques, on the other hand, are much safer. They also offer security features through post-dated cheques and crossed cheques.

It’s safe to say that although the digital economy will continue to grow, cheques are not going anywhere, for a long time