Photo Checks can Help Reduce the National Debt
September 24, 2009 - Posted in Shopping
It seems the world has chosen plastic over paper. When standing at the checkout line, most people will choose plastic, with a small group that always prefer to use cloth. However, a very select and privileged group has chosen to utilize paper every time they speak with the cashier. Of course, this may sound like a discussion on which bags people use, but the truth is, this is all in reference to the forms of payment purchasers choose to use.
Similar to choosing to use specific types of bags has an ecological impact on the world, the choice regarding each form of payment can affect the world on an economic scale. Checks are considered to be a near obsolete form of payment due to credit and debit cards, while cash is used mainly by people who are unable to attain the credit necessary to open a bank account. However, each method incurs a certain amount of risk in order to be accepted.
With a few exceptions, the true cost of each of form of payment is not directly passed to the consumer, though it is eventually indirectly passed on. Many companies must pay a fee for every credit and debit card transaction they process, and in many cases, they actually lose money when a customer buys a small ticket item. Additionally, there is very little security regarding payments made with plastic, especially when compared to people who order checks.
While cash is most secure for businesses, it is the least secure for consumers as there is little recourse if the money is stolen. Debit and credit cards may require some form of personal information or a signature to be processed, but very few cashiers actually compare the name on the card with a photo ID, resulting in a higher rate of identity theft and fraud. The risk associated with reimbursement and insurance has forced the increased processing rates.
Surprisingly, the most secured form of payment is the least used today. Where money can be lost or stolen, and credit cards can be used until the bank closes the account, photo checks have built in security measures. On top of the special MICR ink, preprinted personal information, and a picture of the account owners choosing, most companies require a photo ID with an address that matches the address on the check, regardless of the purchase amount. These security features are recognized by banks, and are therefore able to be processed at reduced rates.
It may not seem that a person’s choice between using personal checks, credit cards, debit cards, or cash would have such a massive impact on the national markets, but when the cost of doing business exceeds the gross profits, businesses must make up their losses somewhere. Sadly, since there is no magical cure for handling this loss of revenue, companies tend to reduce their staff, invest in cheaply made products, and overcharge the consumer, who ultimately will pay for their choice, and everyone else’s.
