The Future of Checks in a Digital-First World

Commercial checks aren’t disappearing—but they are transforming. As digital payments become dominant, the role of checks is shrinking, shifting, and evolving in ways that financial institutions (FIs) can’t afford to ignore. 

The Decline in Check Usage Is Real

In 2004, 81% of B2B payments involved paper checks. Fast forward to 2025, and that number has dropped to just 26%—a historic low—according to the Association for Financial Professionals (AFP) Digital Payments Survey. 

Federal Reserve data tells a similar story: commercial checks collected through the Fed (representing roughly one-quarter of all U.S. checks cleared today) fell from nearly 17 billion in 2000 to under 3 billion in 2024. That’s a drop of 82%. The volume is shrinking—that’s undeniable. But volume alone doesn’t capture the full story of where checks fit today. 

From Routine to Exceptional

While check volumes have declined, their average dollar value has risen dramatically. Two decades ago, the average commercial check was under $1,000. Today, it’s more than $3,000. 

What’s happening?  

• Smaller, routine payments have migrated to ACH, cards, and other electronic payment rails.
• Checks are increasingly reserved for large, contractual, or exceptional transactions, such as payments tied to real estate, insurance, health care, legal settlements, or B2B invoices.  

For FIs, this means preparing to handle fewer—but often higher-value—checks with efficiency, security, and accuracy. 

Why Checks Still Persist—Especially for Small Businesses 

Despite the long-term decline, check usage hasn’t disappeared. In fact, among small and very small firms, usage actually rose: 73% of businesses reported writing checks in 2024, up from 68% in 2022 (according to the Federal Reserve). 

Why the persistence? 

• Familiarity and trust among small business owners
• Legacy invoicing systems that still depend on checks
• Legal or contractual requirements that mandate paper
• Customer preferences that businesses must accommodate 

This “long tail” of checks isn’t going away overnight. Ignoring it risks alienating valuable small business clients. Instead, the opportunity is to modernize how these checks are processed and managed. 

The End of Float: Faster Payments Turn Up the Pressure

One of the last advantages checks offered was “float”—the time period between when a check was mailed and when it cleared. That advantage is disappearing fast. 

With the rise of same-day ACH, RTP, and FedNow instant payments, businesses no longer rely on checks to manage cash flow timing or payment float. Faster payments compress settlement cycles, further squeezing the role of checks in business-to-business transactions. 

For financial institutions, this creates both pressure and opportunity: modernize receivables now, or risk falling behind client expectations for speed and efficiency. 

The Strategic Opportunity for Financial Institutions 

Checks may not be the future, but they still represent over $8 trillion in annual flow in the U.S., according to data from the Federal Reserve.  

The institutions that win in this environment will: 

• Digitize check flows with modern lockbox, remote lockbox, and electronic lockbox solutions to ensure high-value commercial checks are converted to digital images as soon as possible.
• Support and educate small businesses that still rely on checks, positioning digitization not just as operational efficiency but also as fraud and risk reduction.
• Unify receivables into one integrated, digital-first platform so businesses can manage all incoming payments together in a single view. 

The Next Chapter for Checks and Receivables  

The future of checks isn’t about extinction, but redefinition. Checks are fewer, larger, and for specific use cases—but they remain essential for many businesses, especially SMBs. 

For financial institutions, the path forward is clear: modernize check processing as part of a broader integrated receivables strategy. Doing so not only protects current client relationships but also positions FIs to lead in the digital-first era. 

That’s where CheckAlt comes in. We help financial institutions bridge paper and digital payments seamlessly through modern lockbox, electronic lockbox, remote capture, and online payment solutions.  

Get in touch with us today and discover how we can help you modernize check processing and unify all receivables—paper and digital—on a single platform.