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Cheque

A cheque is a negotiable financial instrument defined under law as a bill of exchange drawn on a specified banker and payable on demand, instructing the bank to transfer a specified sum of money from the drawer's account to the named payee or bearer. Spelled 'cheque' in British English and 'check' in American English, this written order, typically printed on paper and including details such as the date, amount in figures and words, payee's name, and the drawer's signature, serves as a secure method for payments without the need to carry cash.^[1] Cheques originated in ancient banking practices but evolved into their modern form in 13th-century Venice as a tool for facilitating international trade by allowing merchants to transfer funds without transporting physical money.^[2] The use of cheques expanded significantly in Europe during the 17th and 18th centuries, with the first pre-printed cheque forms appearing in England in the 1750s from private banks like Vere, Glyn & Hallifax.^[3] By the 19th century, cheques became standardized under legal frameworks such as the UK's Bills of Exchange Act 1882, which codified their negotiability and protections for parties involved.^[4] Key features include the drawer's authorization for payment, the drawee bank's role in honoring or dishonoring the instrument, and the payee's right to endorse and deposit or cash it.^[5] Cheques should generally be presented within six months in the UK, after which they are considered 'stale' and banks may refuse to honor them without further instruction from the drawer.^[6] Various types of cheques exist to suit different transaction needs, enhancing security and specificity.^[7] A bearer cheque is payable to the holder without endorsement, while an order cheque requires the payee's name and endorsement for payment.^[8] Crossed cheques, marked with two parallel lines, can only be deposited into a bank account and not cashed over the counter, reducing fraud risk.^[9] Other variants include post-dated cheques, which are invalid until the specified future date, and certified cheques, guaranteed by the bank with funds set aside upon issuance.^[10] Despite their historical prominence, cheque usage has declined sharply in recent decades due to the rise of digital alternatives like electronic transfers and cards, with UK volumes around 20 million in the first half of 2025, continuing to decline from previous years.^[11] In the UK, cheques remain relevant for certain payments such as to charities, landlords, and small businesses, but overall, they account for less than 1% of non-cash transactions as faster, more convenient options dominate.^[12] Regulatory efforts, including the Cheques Act 1957, continue to protect users by treating paid cheques as receipt evidence and limiting banker liability for losses.^[13]

Fundamentals

Nature and Definition

A cheque is a bill of exchange drawn on a banker and payable on demand.^[14] In essence, it constitutes an unconditional order in writing, addressed by the drawer to the bank, signed by the drawer, and directing the payment of a certain sum of money to the specified payee or to the bearer.^[15] This instrument facilitates the transfer of funds from the drawer's account without the physical exchange of cash, serving as a directive for the bank to debit the drawer's balance upon proper presentment.^[14] Legally, a cheque qualifies as a negotiable instrument in common law jurisdictions under statutes such as the United Kingdom's Bills of Exchange Act 1882, which governs its form, transfer, and enforcement.^[4] Its key characteristics include being an unconditional order to pay, drawn specifically on a banking institution, payable exclusively on demand rather than at a future date, and transferable by means of endorsement completed by delivery.^[15] These attributes ensure the cheque's fluidity in commercial transactions, allowing holders to negotiate it freely while maintaining the drawer's liability until payment or dishonor.^[14] A cheque differs from a promissory note, which involves a direct and unconditional promise by the maker to pay the payee, without requiring an intermediary party.^[16] In contrast to a general bill of exchange, which may be payable at a fixed future time and drawn on any person or entity, a cheque is invariably payable on demand and addressed solely to a banker as the drawee.^[15]^[14] The basic mechanics of a cheque involve its negotiation through endorsement, whereby the payee signs the reverse to transfer rights to another holder, enabling successive transfers until presentment. Upon receipt, the holder presents the cheque to the drawee bank for payment, which must occur within a reasonable time to hold the drawer accountable; failure to present promptly may discharge the drawer's obligation. This process underscores the cheque's role as a demand-based payment mechanism reliant on timely action for enforceability.^[14]

Etymology and Spelling

The term "cheque" derives from the Old French word eschequier, meaning a check in the game of chess, which itself traces back to the Arabic shāh (king) via Persian influences, denoting a position of control or restraint.^[17] In the banking context, this evolved in 18th-century English slang to refer to a counterfoil or stub used by goldsmith-bankers in London to verify transactions, symbolizing a "check" against forgery or error.^[18] The financial sense of a written order for money drawn on a bank first appeared around 1798, distinguishing it from earlier instruments like the bill of exchange, which was a broader merchant tool for deferred payments across locations, whereas the cheque became a demand-draft payable immediately to a banker.^[19] The spelling "cheque" emerged as a variant influenced by the French chèque and the English exchequer (a treasury term also rooted in chess), gaining traction in British banking terminology around 1828, as noted in James William Gilbart's Practical Treatise on Banking. By the early 19th century, "cheque" was standardized in the United Kingdom and Commonwealth countries for the financial instrument, while "check" persisted as the original and general English form, particularly in American English where it was used from the late 18th century onward in early banking practices.^[20] In the United States, "check" became the dominant spelling by the 19th century, reflecting simpler orthographic preferences and avoiding confusion with the verb or noun senses of "check."^[21] Pronunciation of "cheque" aligns closely across variants, typically as /tʃɛk/ in both British and American English, emphasizing the shared phonetic roots from chess terminology.^[22] Globally, the term has been adapted into non-English languages with minor phonetic shifts, such as French chèque (/ʃɛk/), Spanish cheque (/ˈtʃe.ke/), and German Scheck (/ʃɛk/), often retaining the banking connotation while incorporating local linguistic conventions.^[23]

History

Early Origins

The precursors to modern cheques can be traced to ancient payment systems, where written orders facilitated transfers without physical currency. In Mesopotamia around 2000 BCE, merchants and temple officials used inscribed clay tablets as promissory notes to record promises of payment, enabling trade across distances by authorizing future delivery of goods or silver equivalents.^[24] These tablets served as early drafts, documenting debts and credits in cuneiform script, though they lacked the negotiability of later instruments.^[25] In the Roman Empire from the 3rd century BCE to the 3rd century CE, bankers known as argentarii operated deposit accounts and issued perscriptio—written payment orders directing funds from a depositor's account to a third party, functioning as primitive cheques.^[26] These orders were recorded in account books (codices) for legal verification, allowing secure transactions in bustling forums without carrying coinage, and were redeemable in cash or credited to another account.^[26] Earlier influences appeared in Ptolemaic Egypt during the 1st century BCE, where papyrus fragments from mummy cartonnage document non-transferable payment orders to bankers, typically for small copper amounts, presented in person or via agents.^[27] Medieval Europe built on these foundations through Italian banking innovations in the 13th century, when merchants in Genoa, Florence, and Venice developed letters of credit and bills of exchange to finance international trade.^[28] These instruments allowed a trader in one city to draw funds from a correspondent banker in another, using written orders payable to a named beneficiary or bearer, often with interest disguised as exchange rate differences to evade usury bans.^[28] By the early 14th century, such bills circulated widely across Europe, transferable by endorsement, providing a safer alternative to transporting specie for cross-border commerce. The modern cheque emerged in 17th-century England amid the growth of deposit banking by London goldsmiths, who accepted gold deposits and issued receipts transferable by written order. The earliest surviving English cheque dates to February 16, 1659, a handwritten order for £400 drawn by Nicholas Vanacker on the goldsmith-bankers Morris and Clayton, payable to Mr. Delboe.^[3] Goldsmiths like Morris and Clayton formalized these as account transfers, establishing mutual acceptance among at least 17 bankers by the 1660s, which enabled informal clearing.^[19] The founding of the Bank of England in 1694, which issued redeemable promissory notes, further standardized paper-based payments and influenced cheque practices by promoting reliable drawn instruments over cash.^[19] By the 18th century, cheques gained traction in England as banknotes faced issuance restrictions, doubling the number of London banks between 1760 and 1800.^[19] Goldsmith-banker Lawrence Childs of Child & Co. introduced the first printed cheques with serial numbers in 1762, enhancing security and trackability over handwritten orders.^[29] Around 1770, informal daily exchanges of cheques began among London bank clerks at taverns like the Six Bells, evolving into the London Clearing House by 1773 for efficient settlement.^[19] Legal recognition solidified through common law, treating cheques as assignable bills of exchange; for instance, the 1758 case Miller v. Race affirmed the negotiability of similar instruments, extending protections to cheques by the late 18th century.^[30]

Modern Development

The widespread adoption of cheques accelerated in the 19th century following the Industrial Revolution, as expanding commerce in Europe and the United States necessitated more efficient payment mechanisms beyond cash and bills of exchange. In Britain, the London Clearing House, initially formed in 1773 by thirty-one banks to facilitate cheque settlements, saw its operations formalize and expand significantly during this period to handle the growing volume of transactions among member institutions. Similarly, in the United States, the New York Clearing House Association was established in 1853 to streamline interbank cheque clearing, marking a key step toward organized payment processing amid rapid economic growth.^[19]^[31]^[32] During the 20th century, cheque usage standardized globally, particularly through technological innovations and the influence of colonial banking networks established by European powers. The introduction of Magnetic Ink Character Recognition (MICR) encoding in the mid-1950s, developed by the American Bankers Association in collaboration with institutions like the Stanford Research Institute, enabled automated machine-readable processing of cheques, drastically reducing manual handling errors and speeds. This advancement facilitated the first widespread computerized cheque processing in the 1960s, with systems like IBM's 1210 reader-sorter allowing banks to sort thousands of items per hour via magnetic reading. Concurrently, British and other European colonial banking systems spread cheque practices to regions such as India, Africa, and Australia, embedding the instrument in post-colonial financial infrastructures that persisted into independence eras.^[33]^[34] In the post-2000 era, the shift toward digital integration transformed cheque handling, with electronic imaging emerging as a pivotal development. The U.S. Check 21 Act, enacted in 2003 and effective from October 2004, authorized the creation and exchange of digital "substitute checks" as legal equivalents to paper originals, enabling banks to truncate physical cheques and process images electronically for faster clearing. This legislation integrated cheques with online banking platforms, allowing remote deposit capture via mobile apps and scanners, thereby extending their utility in a digitizing economy. Globally, similar electronic truncation systems proliferated, supporting hybrid paper-digital workflows.^[35]^[36] By the 2010s and into 2025, regulatory and technological advancements further diminished cheque reliance, favoring real-time electronic alternatives. The European Union's Payment Services Directive 2 (PSD2), implemented in 2018, promoted open banking and secure digital payments, indirectly curbing cheque volumes by mandating stronger authentication for electronic transactions and fostering competition from fintech innovations. In the U.S., cheque issuance declined sharply from approximately 18 billion in 2000 to under 5 billion by 2023, driven by the adoption of real-time payment networks like The Clearing House's RTP (launched 2017) and the Federal Reserve's FedNow (2023), which offer instant settlement and have seen volumes surge over 60% year-over-year by mid-2025. A 2025 U.S. executive order accelerated this trend by directing federal agencies to phase out paper cheques for electronic disbursements, underscoring cheques' evolving role amid broader payment modernization.^[37]^[38]^[39]

Components

Core Elements

A standard cheque, as a negotiable instrument, must include several mandatory fields to ensure its validity and processability. These essential elements are the date of issue, which specifies when the payment is to be made on demand; the name of the payee, indicating the intended recipient; the amount, expressed both in numeric form (e.g., $100.00) and in written words (e.g., one hundred dollars) to prevent discrepancies; the drawer's signature, authenticating the order to pay; and bank details, such as the routing number, account number, and cheque number, typically encoded in the Magnetic Ink Character Recognition (MICR) line at the bottom in countries like the United States; other jurisdictions use equivalent printed details like sort codes.^[40]^[41]^[42] The structural layout of a cheque is designed for clarity and security, with the front side featuring pre-printed fields for the mandatory information, including space for the drawer's name and address, while the reverse side is reserved for endorsements. Standard sizes vary by region but adhere to established norms; in the United States, personal cheques measure approximately 6 inches by 2.75 inches, ensuring compatibility with processing equipment. In the United Kingdom, cheques conform to the Cheque and Credit Clearing Company (C&CCC) Standard 3 for layout and font.^[41]^[43]^[44] Integral to the core design are basic security features that protect against forgery and alteration, such as watermarks—subtle images visible when held to light—microprinting in fine lines (e.g., along the signature area) that blurs when photocopied, and heat-sensitive or chemical-reactive inks that reveal warnings like "VOID" if tampered with. These elements are standardized to maintain integrity during handling.^[41] For legal validity, a cheque must be an unconditional order to pay a fixed sum, properly signed by the drawer, and dated, with presentation required within a reasonable time—often six months in jurisdictions such as the UK and US—to avoid becoming stale-dated and potentially dishonored.^[45]^[46]^[47] Field placement for these core elements can vary by region, with differences in the positioning of the date, amount boxes, or bank details to align with local banking practices.^[40]

Supplementary Features

Endorsements on cheques serve as supplementary mechanisms to facilitate or restrict the transfer of payment rights, enhancing security and control beyond the core issuance. A blank endorsement occurs when the payee simply signs their name on the back of the cheque, converting it into a bearer instrument payable to any holder, which simplifies transfer but increases theft risk. In contrast, a special endorsement involves the payee signing and adding "pay to the order of [specific name]," directing payment to a designated transferee and allowing further negotiation. Restrictive endorsements limit usage, such as by inscribing "for deposit only" or "pay to [name] account no. [number]," preventing cashing and mandating deposit into a specified account to mitigate fraud during handling. Attached documents complement cheques by aiding record-keeping and transaction tracking without impacting the instrument's validity. Counterfoils, the detachable stubs in chequebooks, record essential details like date, payee, and amount alongside the issuer's signature, providing a duplicate for accounting purposes. Deposit slips accompany cheques during banking submission, itemizing cash and cheque deposits with account details to streamline crediting and reconciliation. Memos or supporting notes, often clipped or referenced, document the transaction's purpose, such as invoice numbers, ensuring audit trails while remaining separate from the cheque body. Optional fields on cheques offer flexibility for additional instructions or notations. In some countries, such as the US, the memo line, typically at the bottom, allows issuers to note the payment's intent, like "rent for November," aiding bookkeeping without legal enforceability; UK cheques generally lack this field. A "not negotiable" clause, added by crossing the cheque and writing these words, restricts transferability, meaning any holder acquires no better title than the endorser, though the cheque remains payable to the named payee. Regional differences include standard crossing with two parallel lines in Commonwealth countries to mandate bank deposit. Post-dated instructions involve entering a future date, instructing banks not to honor the cheque until that time, which supports deferred payments but does not guarantee funds availability. Non-core security add-ons incorporate advanced materials to deter counterfeiting and alterations. Holograms, embedded foil patches, display shifting images under light, verifying authenticity during inspection. UV inks produce invisible fluorescent patterns or fibers visible only under ultraviolet light, resisting reproduction by standard scanners. Pantograph patterns, fine background prints, reveal words like "void" or "copy" when photocopied, as the design exploits copier resolution limits to expose duplicates. In processing, attachments and endorsements accompany the cheque through clearing without altering its core validity, as banks verify endorsements for authorization while treating supplementary items like counterfoils or deposit slips as ancillary for routing and recordation. For instance, restrictive endorsements guide deposit-only handling, but the cheque's payability remains intact if properly executed, with attachments scanned separately in electronic systems to maintain transaction integrity.

Standard Processes

Issuing and Negotiating

Issuing a cheque begins with the drawer, the individual or entity authorizing the payment, carefully completing the instrument's fields to ensure accuracy and prevent disputes. The process starts by entering the current date in the designated space, typically in day-month-year format to avoid ambiguity, followed by the payee's full name or business designation in the "pay to the order of" line. The amount is then specified twice—first in numeric form (e.g., £100.00) in the box provided, and then in words (e.g., "one hundred pounds only") on the line below to guard against alterations. A brief memo or reference number may be added for record-keeping, though it is optional. Finally, the drawer signs the cheque in the signature line at the bottom right, which serves as legal authorization for the drawee—the drawer's bank—to release the funds upon presentment. Alterations, such as crossing out or overwriting entries, should be avoided, as they can invalidate the cheque or lead to rejection by the bank.^[48] Once issued, the cheque enters the negotiation phase, where it is transferred from the drawer to the payee through simple delivery if made payable to a specific bearer, or via endorsement if it is an order instrument naming a particular payee. The payee, the intended recipient of the funds, receives the cheque and may negotiate it by endorsing the reverse side with their signature, often including "for deposit only" followed by their account details to restrict further transfer and enhance security. This endorsement transfers the right to receive payment to the payee's bank or another holder. The payee then presents the endorsed cheque to their bank for deposit into their account or, less commonly, for cash if the cheque is uncrossed and the bank permits it. Presentment occurs when the payee's bank submits the cheque to the drawer's bank for validation and payment authorization. Throughout this chain, the drawer initiates the transaction, the drawee verifies sufficient funds and authenticity, and the payee facilitates the transfer.^[49]^[50] Common practices during issuance and negotiation include crossing the cheque to limit its handling. A crossed cheque features two parallel transverse lines drawn across the top left corner, indicating it must be deposited into a bank account rather than cashed over the counter. Adding the words "account payee only" between the lines further restricts negotiation, ensuring funds are credited solely to the named payee's account and reducing theft risks. Additionally, the drawer may issue a stop-payment order to the drawee bank if the cheque is lost, stolen, or issued in error, provided it has not yet been presented; this involves providing the cheque number, date, payee, and amount, typically via phone or online, followed by written confirmation, and incurs a fee. Such orders remain effective for six months unless renewed.^[51]^[52] The timeline for negotiation is constrained by the cheque's validity period, after which it becomes stale-dated and may not be honored. In standard practice, cheques remain valid for six months from the issue date, meaning the payee must present it within this window to avoid requiring a replacement from the drawer. Banks may still process older cheques at their discretion, but presentment beyond this period often results in refusal to protect against outdated transactions.^[53]

Clearing and Settlement

The clearing process for cheques involves the transfer of the instrument from the collecting bank to the paying bank for verification and payment, typically through interbank networks to ensure efficient routing and reduce physical handling. Upon receipt from the payee, the collecting bank presents the cheque to the paying bank, either directly or via a clearing house, where the paying bank verifies the drawer's account balance and authenticity before authorizing payment. In the United States, this is often facilitated by the Federal Reserve Banks, which process forward and return cheques, crediting the collecting institution while debiting the paying bank.^[54] In the United Kingdom, the Cheque and Credit Clearing Company (now part of Pay.UK) manages the process through the Image Clearing System, where digital images of cheques are exchanged among member banks.^[55] Settlement follows successful clearing and entails the actual transfer of funds between banks to finalize the transaction, often on a net basis to minimize liquidity needs. In the US, most cheques settle within one business day via the Federal Reserve's services, with electronic presentment enabling rapid interbank debits and credits.^[54] In the UK, under the Image Clearing System, cheques paid in on a weekday before the cut-off time typically have funds available to the payee by 23:59 the next working day, with the paying bank required to decide on payment or return by the end of that day, providing settlement finality within one to two working days.^[55] This timeline ensures that payees gain access to funds promptly while allowing paying banks time for verification. Lock box services provide businesses with a centralized mechanism to accelerate cheque receipt and deposit, particularly for high-volume receivables. Under this system, customers mail payments to a dedicated post office box maintained by a financial institution, which retrieves, scans, and processes the cheques daily, depositing funds into the business's account and transmitting remittance data for accounts receivable updates.^[56] Wholesale lock boxes handle fewer, higher-value items like corporate payments, while retail versions manage numerous low-value cheques, such as utility bills, often converting them to electronic formats for faster clearance.^[56] Technological aids enhance efficiency in cheque sorting and exchange, minimizing manual intervention. Magnetic Ink Character Recognition (MICR) technology encodes routing, account, and cheque numbers at the bottom of the instrument using magnetic ink, allowing automated readers to sort and route items accurately during processing.^[54] In the US, the Check 21 Act enables electronic image exchange, where scanned cheque images are transmitted instead of physical documents, with nearly all interbank checks presented electronically; similar image-based systems in the UK further streamline the clearing cycle.^[54] Banks typically impose fees for cheque clearing services to cover processing costs, while regulations govern funds availability to protect consumers. In the US, under Regulation CC (Expedited Funds Availability Act), banks must make the first $275 of local checks available the next business day, with full amounts for government and cashier's checks available immediately, though institutions may charge deposit fees ranging from $0 to $15 per item depending on account type.^[57] In the UK, clearing is generally fee-free for standard personal cheques, but businesses may incur charges of £1-£5 for lock box or bulk processing, with funds credited by the next business day under the Image Clearing System.^[58] Holds can extend up to two days for non-local cheques under Reg CC, ensuring banks have time to verify and mitigate risks.^[57]

Variations

Secured and Guaranteed Types

Secured and guaranteed types of cheques provide enhanced assurance of payment by involving direct bank involvement, distinguishing them from ordinary personal cheques through mechanisms like fund reservation or bank liability. These variants are designed to mitigate risks associated with insufficient funds or non-payment, offering payees greater confidence in receiving the specified amount.^[59] A cashier's cheque, also known as a bank cheque, is issued by a bank or credit union using its own funds rather than those of the account holder, making it prepaid and irrevocable once issued. The drawer provides the bank with the full amount in advance, and the bank acts as both the drawer and drawee, guaranteeing payment regardless of the drawer's subsequent financial status. This form is particularly secure because the funds are withdrawn from the bank's reserves at issuance, eliminating the possibility of the cheque bouncing due to the drawer's insolvency.^[60]^[61] Certified cheques involve the issuing bank verifying the drawer's account balance and reserving the exact amount at the time of issuance, after which the cheque is stamped or marked as certified to confirm the funds' availability. Unlike a standard cheque, the bank assumes responsibility for payment by setting aside the funds, though the cheque remains drawn on the drawer's account; this reservation prevents the drawer from accessing those funds until the cheque clears. The process typically requires the drawer's presence or authorization, and the certification serves as the bank's guarantee to the payee.^[62]^[63]^[59] Bank drafts, sometimes referred to as banker's drafts, are similar to cashier's cheques but are drawn by one bank on another financial institution, often used for transfers between different banks to ensure secure remittance. The payer instructs their bank to issue the draft, which debits the payer's account and credits the issuing bank's reserve; the receiving bank then honors it upon presentation. This type is non-revocable and backed by the issuing bank's guarantee, providing a reliable method for payments where the parties may not share the same financial institution.^[64]^[65]^[66] Teller's cheques function as a variant of cashier's or bank drafts, typically issued by a bank teller and drawn on another depository institution, often to accommodate non-account holders seeking a guaranteed payment instrument. They are prepaid by the purchaser and carry the issuing bank's assurance of funds, similar to a cashier's cheque, but emphasize accessibility for individuals without an established account relationship. Under U.S. law, for instance, a teller's cheque is defined as any cheque issued by one depository institution and drawn on another.^[67]^[61] These secured and guaranteed cheques are commonly employed in scenarios requiring high trust and minimal risk, such as real estate purchases where buyers provide deposits or closing payments, or international transactions to facilitate cross-border transfers without the vulnerabilities of personal cheques. In real estate deals, for example, a bank draft or cashier's cheque ensures the seller receives guaranteed funds promptly upon settlement. They are also favored for large-scale business payments or escrow arrangements, where standard endorsement processes may apply but the guarantee overrides concerns about the drawer's reliability.^[68]^[69]^[70]

Specialized Forms

Payroll cheques, also known as payroll checks, are specialized payment instruments issued by employers to compensate employees for wages and salaries. These cheques typically include or are accompanied by a detachable pay stub that itemizes gross earnings, deductions such as taxes and benefits, net pay, and year-to-date totals, ensuring transparency and compliance with labor regulations. In jurisdictions like California, employers are required by law to provide accurate itemized wage statements with each paycheck to verify hours worked, rates, and withholdings, helping employees track their compensation and facilitating audits.^[71]^[72] This format supports adherence to federal and state labor laws, such as the Fair Labor Standards Act, by documenting payroll details without mandating stubs in all cases but emphasizing clear record-keeping.^[73] Traveller's cheques were a prepaid form of payment designed for international travel, allowing users to exchange them for currency or goods at banks and merchants worldwide. Introduced by American Express in 1891, these instruments featured a counter-signature system for security, making them refundable if lost or stolen upon verification, which protected travelers from financial loss.^[74]^[75] Issued by financial firms like American Express, they functioned as a safe alternative to carrying cash, with the issuer guaranteeing redemption after confirming the traveler's identity. However, major issuers discontinued new traveller's cheques as of 2021, though existing ones remain valid and redeemable indefinitely.^[76]^[77] Warrants are government-issued instruments used for disbursing public funds, functioning similarly to cheques by directing payment from a treasury account to a specified recipient. Unlike standard cheques, warrants carry explicit fiscal authority derived from legislative appropriations, serving as evidence of approved funding for government programs and expenditures.^[78] For instance, state treasuries issue warrants as negotiable orders payable from dedicated funds, ensuring controlled release of public monies for obligations like vendor payments or employee salaries.^[79] They are drawn against governmental treasuries rather than commercial banks, emphasizing their role in official fiscal operations.^[80] Money orders and postal orders serve as fixed-fee, prepaid payment alternatives to cheques, particularly for secure remittances where the sender prepays the amount plus a nominal issuance fee. These instruments are typically non-negotiable, made payable to a specific recipient without endorsement capabilities, reducing fraud risk and making them suitable for mailing funds domestically or internationally.^[81] Issued by postal services or financial institutions, they provide a reliable method for transfers, with the issuer guaranteeing payment upon presentation by the named payee.^[82] Oversized cheques are novelty items designed for ceremonial purposes, such as presenting awards or prizes in publicity events, and are not intended for actual financial transactions. Commonly used in lotteries, fundraisers, and corporate announcements, these large-format replicas—often measuring 16 by 32 inches—feature exaggerated designs for visual impact during photo opportunities but lack the legal backing for deposit or clearance.^[83] They serve promotional roles, like displaying jackpot winnings symbolically before issuing standard payments, enhancing media coverage without serving as functional instruments.^[84] Payment vouchers are internal accounting documents used by businesses to authorize and record disbursements, resembling cheques in format but confined to organizational use for tracking liabilities and expenses. These prenumbered forms detail the payee, amount, purpose, and supporting invoices, streamlining accounts payable processes and bolstering internal controls against unauthorized payments.^[85] By mimicking cheque structures, vouchers facilitate approval workflows, ensuring all expenditures are documented and auditable before actual funds are released via checks or electronic transfers.^[86]

Global Usage

English-Speaking Countries

In English-speaking countries, particularly those with common law traditions such as the United Kingdom, United States, Canada, Australia, and New Zealand, cheques function as negotiable instruments governed by statutes derived from the Bills of Exchange Act 1882, emphasizing transferability through endorsement and delivery. These jurisdictions share rules on endorsement, where the payee typically endorses the back to transfer ownership, and a shift toward electronic funds transfer (EFT) systems has reduced reliance on physical cheques while maintaining legal frameworks for their use. Negotiability allows cheques to be treated as unconditional orders to pay, subject to drawer funds availability, with protections for holders in due course.^[4] In the United Kingdom, cheques are regulated under the Bills of Exchange Act 1882, which defines them as bills of exchange drawn on a banker payable on demand, with crossed cheques—marked by two parallel lines—being the standard to ensure deposit into a bank account rather than cash withdrawal. This crossing, often with "account payee only," restricts transferability for added security. Cheques remain valid for six months from the date of issue, after which banks may refuse payment as stale-dated. By 2024, cheque volumes had fallen to 91 million, representing just 0.2% of total payments, largely supplanted by the Faster Payments Service introduced in 2008 for near-instant transfers. As of Q1 2025, quarterly volumes were 20.4 million.^[87]^[53]^[88]^[89] The United States operates under Uniform Commercial Code (UCC) Articles 3 and 4, which classify cheques as negotiable instruments and outline bank deposit and collection processes, respectively, with federal overlay from the Check 21 Act of 2003 enabling electronic imaging and truncation for faster clearing. The Magnetic Ink Character Recognition (MICR) line, printed in magnetic ink at the cheque's bottom, is required for automated processing, encoding routing, account, and serial numbers. Cheques are generally considered stale after six months, though banks are not obligated to pay them. Post-dated cheques, written for future dates, are enforceable but vary by state; for instance, some states like California allow early payment unless notified, while others protect against it.^[90]^[91]^[92] Canada's system mirrors the U.S. in many respects, drawing from the federal Bills of Exchange Act and provincial adaptations, with cheque imaging becoming widespread since 2018 when over 70% of interbank cheques were exchanged as digital images under Payments Canada rules, accelerating clearance to two days. Cheques are valid for six months, treated as stale-dated thereafter unless certified. Endorsement rules align with common law principles, allowing special or blank endorsements for transfer.^[93]^[94]^[95] In Australia and New Zealand, the Electronic Transactions Acts (1999 and 2002, respectively) facilitate digital alternatives while upholding cheque negotiability under bills of exchange legislation. Australian cheques are typically crossed by default to mandate bank deposit, with usage plummeting nearly 90% over the past decade to under 1% of non-cash payments by 2023, prompting a government plan to phase out the system by 2030, with a transition plan released in November 2024 supporting users through the change; government use ends by 2028. New Zealand has seen similar declines, with cheque volumes dropping over 50% since 2016 and comprising less than 1% of transactions by 2019, as banks like ANZ ceased issuing cheque books in 2021; crossed cheques are standard, and validity is generally six months. Both countries emphasize EFT via systems like Australia's New Payments Platform for real-time transfers.^[96]^[97]^[98]^[99]^[100]^[101]

Other Jurisdictions

In India, cheques are governed by the Negotiable Instruments Act, 1881, which defines them as bills of exchange drawn on a specified banker and payable on demand.^[102] Despite the rise of digital payments, cheques maintain notable usage in rural areas, where digital infrastructure may be limited and traditional methods persist for transactions like agricultural payments and small business dealings.^[103] Under Section 138 of the Act, the dishonour of a cheque due to insufficient funds constitutes a criminal offence, punishable by imprisonment for up to two years, a fine up to twice the cheque amount, or both.^[104] Cheques in India have a validity period of three months from the date of issue, as stipulated by Reserve Bank of India guidelines, after which they cannot be presented for payment.^[105] In Japan, cheques are regulated under the Bill of Exchange Act of 1932 and the related Cheque Act, which outline their form, endorsement, and payment processes as negotiable instruments payable on demand.^[106] Usage has become rare since the 2010s, overshadowed by the rapid adoption of electronic payments, with the cashless transaction ratio rising from 13% in 2010 to 42.8% by 2024, driven by government initiatives and mobile banking.^[107] Banks and regulations emphasize electronic transfers for efficiency, while strict penalties under the Penal Code address forgery, treating alterations or counterfeit cheques as criminal fraud punishable by imprisonment up to ten years depending on the amount involved.^[108] Israel's cheque system operates under the Banks Law, 5741-1981, which empowers the Bank of Israel to supervise banking operations and payment instruments, including provisions for clearing and settlement.^[109] Cheques are typically crossed with two parallel lines to ensure deposit-only processing, a standard practice that enhances security and aligns with anti-fraud measures, though not explicitly mandated in statute but enforced through banking protocols.^[110] Their use is declining amid the growth of real-time gross settlement systems like ZAHAV, which facilitate instant electronic transfers and have reduced reliance on paper-based instruments.^[111] In Turkey, cheques are regulated through the Turkish Commercial Code (Article 780 onward) and the dedicated Cheque Law No. 5941 of 2009, which detail issuance, endorsement, and liability as key instruments in commercial transactions.^[112] They remain common among businesses for deferred payments and trade settlements, serving as a trusted alternative where credit access is constrained.^[113] The 2009 law initially imposed imprisonment for up to one year for dishonoured cheques due to insufficient funds, but amendments shifted to judicial fines equivalent to at least the cheque amount plus interest, with potential bans on future issuance.^[114] Across these jurisdictions, cheque validity periods vary—typically three months in India, up to six months in Turkey—while enforcement mechanisms emphasize civil recovery with criminal elements in cases of intent, such as India's Section 138 penalties for wilful default.^[102]

Decline and Alternatives

Factors Driving Decline

The decline in cheque usage worldwide stems primarily from the rapid adoption of digital payment technologies, which offer faster, more convenient alternatives to traditional paper-based methods. Since the 1990s, cheque volumes in many developed economies have fallen by more than 50%, driven by the proliferation of electronic systems that bypass the need for physical instruments.^[115] This shift reflects broader technological advancements that have rendered cheques obsolete for most everyday transactions.^[116] A key driver is the rise of electronic funds transfer (EFT) systems, which enable seamless digital movement of money without paper intermediaries. Introduced widely in the late 20th century, EFT has revolutionized payments by allowing instant account-to-account transfers, significantly reducing reliance on cheques for both personal and business use.^[117] Complementing this, mobile payment apps and real-time payment networks, such as the RTP network launched in the United States in 2017, provide near-instantaneous settlement, further accelerating the move away from cheques.^[118] These innovations have made digital options ubiquitous, with cashless payments surging globally and correlating directly with cheque reductions across 20 countries from 2012 to 2021.^[116] Cost inefficiencies also play a substantial role, as processing cheques incurs significantly higher expenses than digital equivalents. Issuing and clearing a single cheque can cost between $4 and $20, including printing, mailing, and manual handling, whereas electronic transfers often cost mere cents and occur instantaneously.^[119] Banks and businesses increasingly impose fees on cheque usage to discourage it, amplifying the economic incentive to switch to automated digital methods that streamline operations and reduce administrative burdens.^[120] This disparity in processing efficiency has led to a marked drop in cheque adoption, particularly in high-volume commercial settings where cumulative savings from digital alternatives are substantial.^[121] Security vulnerabilities inherent to cheques exacerbate their decline, as they lack the robust encryption and real-time monitoring of digital platforms. Paper cheques are prone to interception, alteration, or forgery during transit, making them easier targets for fraud compared to encrypted EFT and app-based systems that employ multi-layered protections.^[122] Despite perceptions among some users that cheques are safer, data shows digital methods offer superior fraud detection through automated verification, prompting a broader migration away from vulnerable paper formats.^[123] This concern has intensified with rising incidences of cheque-related scams, further eroding trust in the instrument.^[124] Demographic shifts, particularly among younger cohorts, reinforce this trend, as digital natives overwhelmingly favor card and app-based payments over outdated cheque systems. Generations Z and millennials, who prioritize speed and accessibility, report minimal to no use of cheques, with over 80% of young adults relying on mobile wallets for transactions.^[125] Surveys indicate that Gen Z leads in adopting digital methods, viewing cheques as cumbersome and irrelevant, which sustains the long-term volume decline observed since the 1990s.^[126] As these groups enter the workforce and dominate consumer spending, their preferences accelerate the obsolescence of cheques across generations.^[127] Environmental considerations provide an additional impetus, with initiatives aimed at reducing paper consumption highlighting the ecological toll of cheque production and processing. Each cheque requires paper resources, ink, and transportation, contributing to deforestation and carbon emissions, whereas digital alternatives eliminate these impacts entirely.^[128] Financial institutions have actively promoted paperless transitions, achieving reductions like an 8.5% drop in cheque processing volumes through sustainability-driven policies.^[129] The advent of electronic imaging standards, such as Check 21 in the US, has further minimized physical handling, yielding millions of tons in avoided emissions and aligning with global paper reduction goals.^[130]

Regional Patterns

In North America, cheque usage has experienced a sharp decline over the past two decades, driven by the adoption of electronic alternatives and regulatory incentives for digital migration. In the United States, commercial cheque volumes collected through the Federal Reserve fell from 17 billion in 2000 to approximately 3 billion in 2024, representing an 82.5% reduction, with the shift accelerated by policies from the National Automated Clearing House Association (NACHA) promoting ACH transfers over paper instruments.^[131]^[132] In Canada, cheque volumes dropped from 950 million in 2014 to 379 million in 2023, a 60% decrease, partly mitigated post-2010 by the introduction of cheque imaging that enabled faster electronic processing but ultimately failed to reverse the broader trend toward digital payments.^[133] Europe has seen even steeper reductions in cheque reliance, with widespread implementation of faster clearing systems contributing to the downturn. In the United Kingdom, cheque volumes declined from 848 million in 2012 to 150 million in 2021, continuing a long-term fall from around 1.2 billion in 2000, and reached just 0.2% of all payments by 2024 following the rollout of the Image Cheque Clearing system in 2017, which reduced processing times to one day.^[134]^[12]^[135] Across the European Union, overall cheque volumes decreased from 5 billion in 2010 to 1.02 billion in 2023, accounting for less than 1% of non-cash transactions by 2024, with countries like Germany and Belgium approaching zero usage while France retained a higher but diminishing share.^[136]^[137] In Asia, cheque adoption varies but is uniformly waning amid rapid digital infrastructure growth. India, where cheques accounted for 0.2% of all transaction volumes in the first half of 2025 (down from higher shares pre-UPI launch), continues to see accelerated decline as Unified Payments Interface (UPI) transactions surged to 85% of volumes, totaling over 10,600 crore payments worth Rs 143.3 lakh crore in the same period.^[138] Japan has maintained near-zero cheque usage since the early 2000s, with volumes dropping from 77 million in 2012 to 36 million in 2021 and representing negligible share of cashless payments by capita at 0.29 checks per person.^[134] Oceania reflects a near-complete transition away from cheques, supported by real-time payment innovations. In Australia, annual cheque volumes fell below 50 million by 2023, with 27 million processed in 2022 alone marking a 90% reduction over the prior decade and less than 0.1% of retail payments, increasingly replaced by PayID-linked digital transfers.^[139] New Zealand completed its cheque phaseout in 2021 after a 10% annual decline since 2004, with pre-closure per capita usage at 0.14—higher than Australia's current level but now fully supplanted by electronic systems.^[100]^[139] Comparatively, from 2012 to 2021, cheque volumes declined at compound annual rates of 6.7% in the US, 8.8% in Canada, 15.9% in the UK, and up to 17.4% in Germany, with policy drivers like NACHA's ACH mandates in North America and image-based clearing in Europe accelerating the global shift, resulting in cheques comprising under 5% of transactions across these regions by 2025.^[116]^[132]

Modern Substitutes

Electronic funds transfers (EFTs) have emerged as a primary substitute for traditional cheques, offering faster and more efficient payment processing. In the United States, the Automated Clearing House (ACH) network facilitates batch-processed transfers that are typically low-cost and suitable for recurring or bulk payments, though they may take 1-3 business days to settle.^[140] Wire transfers, by contrast, provide near-immediate settlement—often within hours—for urgent domestic or international transactions, albeit at higher fees ranging from $15 to $50 per transfer.^[141] In Europe, the Single Euro Payments Area (SEPA) enables seamless cross-border EFTs with standardized speed and low costs, supporting instant transfers in many cases to enhance efficiency over paper-based methods.^[142] Digital wallets and mobile payment apps represent another significant shift away from cheques, enabling instant peer-to-peer and merchant transactions via smartphones. Platforms like PayPal, Venmo, and Alipay allow users to link bank accounts or cards for seamless transfers without physical instruments; as of 2025, global digital wallet adoption reached approximately 4.5 billion users.^[143] In the US, PayPal holds a 36% market share among digital wallets, followed by Venmo at 16%, driving a reduction in cheque usage for personal and small business payments.^[144] Card-based payments, particularly debit and credit cards, have largely supplanted personal cheques at point-of-sale (POS) locations by providing quick, secure transactions. The widespread acceptance of debit cards for direct account debits has accelerated the decline of consumer cheque writing at retail, as electronic processing reduces handling time and fraud risks associated with paper.^[145] Credit cards further diminish cheque reliance by offering rewards and protections, with POS adoption contributing to over 60% of global e-commerce transactions via digital methods in 2025.^[146] Real-time payment systems have further eroded cheque usage by enabling instantaneous transfers 24/7. In India, the Unified Payments Interface (UPI) processed approximately 18 billion transactions per month on average in the first half of 2025, accounting for nearly all digital payment volume and surpassing traditional methods like cheques in speed and accessibility.^[147] Similarly, the UK's Faster Payments Service (FPS) supports real-time account-to-account transfers, modernizing infrastructure to handle increasing cashless volumes and reducing reliance on slower cheque clearing.^[148] Hybrid alternatives bridge traditional and digital cheque systems through electronic imaging and truncation. The US Check 21 Act of 2003 authorizes "substitute checks"—high-quality digital reproductions of original cheques that are legally equivalent for clearing purposes, allowing banks to process imaged files instead of physical paper to expedite settlement.^[35] Electronic cheques (e-cheques) extend this by converting cheque data into EFT formats for online submission, maintaining familiarity while leveraging digital speed under frameworks like Check 21.^[149]

Risks and Protections

Fraud Mechanisms

Cheque fraud encompasses various deceptive practices aimed at unlawfully obtaining funds through the manipulation or misuse of cheques. Common mechanisms include forgery, embezzlement, identity theft, and other tactics such as kiting or the use of stolen blank cheques. These methods exploit vulnerabilities in cheque processing, often resulting in substantial financial losses for individuals and institutions.^[150] Forgery involves the unauthorized alteration or replication of cheque details to divert funds. Fraudsters may alter the amount, signature, or payee by using chemical solvents to erase original ink, a technique known as check washing, allowing them to rewrite higher amounts or change the recipient's name without visible damage.^[151] Alternatively, they scrape off printed information with abrasive tools or apply white-out before reprinting details.^[152] Signatures are commonly forged on stolen cheques to mimic the account holder's authorization, while payees are modified to redirect payments to accomplices.^[153] Counterfeit duplicates are created using desktop publishing software, high-quality printers, and magnetic ink character recognition (MICR) technology to produce realistic replicas of legitimate cheques.^[154] Embezzlement occurs when insiders, such as employees with access to financial systems, misuse their positions to issue fictitious or altered cheques for personal gain. This internal fraud often involves creating fake vendor payments or payroll cheques drawn on company accounts, diverting funds without detection during routine reconciliations.^[155] For instance, perpetrators may forge signatures on legitimate blanks or inflate amounts on real transactions, exploiting trust within organizations.^[153] Such schemes have been documented in cases where executives funneled millions through repeated fictitious issuances.^[155] Identity theft facilitates cheque fraud by enabling criminals to use stolen personal information to open new bank accounts or access existing ones for issuing fraudulent cheques. Thieves obtain details like Social Security numbers or account numbers through data breaches or phishing, then impersonate victims to establish accounts from which they write and deposit bogus cheques.^[156] Stolen cheques themselves can expose sensitive information, amplifying the risk as fraudsters leverage it for broader identity-based schemes, such as endorsing and cashing under false identities.^[150] Other methods include check kiting, where fraudsters exploit the processing delay, or "float," between accounts by writing cheques without sufficient funds and depositing them to create artificial balances.^[41] This involves cycling funds across multiple accounts to withdraw cash before discrepancies are detected. Stolen blank cheques are another tactic, where unused forms are pilfered from mail or storage and completed with forged details for immediate deposit or cashing.^[154] Global cheque fraud losses have been significant, with the United States alone reporting over $1.3 billion in financial institution losses in 2023, prior to accelerated digital payment adoption. Check fraud attempts rose 10% from 2023 to 2024, affecting 63% of organizations (as of 2024).^[157]^[158] In the Americas, which account for 80% of worldwide incidents, total losses reached $21 billion that year.^[157]

Dishonoured Cheques

A dishonoured cheque, also known as a bounced or returned cheque, occurs when a bank refuses to honour the payment due to issues unrelated to fraudulent intent, such as insufficient funds in the drawer's account.^[159] Common reasons for dishonour include non-sufficient funds (NSF), where the account balance is too low to cover the cheque amount; account closure, if the drawer's bank account has been closed prior to presentation; or signature mismatch, where the signature on the cheque does not match the specimen on file with the bank.^[160] Upon presentation, the paying bank returns the cheque to the depositing bank, typically marking it with a reason code or description to indicate the cause of dishonour, such as "NSF" for insufficient funds or "account closed." For electronic ACH transactions, standardized NACHA codes like R01 for NSF or R02 for closed account apply. The returned cheque is then forwarded to the payee, who receives notification of the failure during the clearing process. Both the drawer and payee often incur fees as a result of the dishonour. The drawer's bank typically charges an NSF fee, averaging around $18 in the US (as of 2024).^[161] The payee's bank may impose a returned item fee, and the payee can legally add a service charge to the drawer, capped at $20–$40 depending on state law, such as $25 under California's Civil Code § 1719. Legal repercussions for dishonour vary by jurisdiction but generally begin with civil remedies. In the US, the payee can pursue a civil suit against the drawer under the Uniform Commercial Code (UCC) Article 3 to recover the cheque amount, plus interest at the applicable legal rate from dishonor and collection costs. In contrast, some jurisdictions treat repeated or knowing dishonour as criminal; for instance, under Section 138 of India's Negotiable Instruments Act, 1881, the drawer faces up to two years' imprisonment, a fine up to twice the cheque amount, or both, if the payee issues a demand notice and payment is not made within 15 days.^[162] Dishonour can also affect the drawer's banking reputation through consumer reporting agencies. In the US, agencies like ChexSystems record instances of NSF or returned cheques, which may remain on the report for up to five years and hinder the drawer's ability to open new accounts at over 80,000 financial institutions, though it does not directly impact traditional credit scores from bureaus like Equifax. If unpaid, the debt may enter collections, indirectly harming credit scores. To recover funds, the payee may first send a formal demand letter to the drawer requesting payment within a specified period, often 10–30 days. If unresolved, the payee can file in small claims court for amounts under jurisdictional limits (e.g., $5,000–$10,000 in most US states), where processes are simplified and no attorney is required, allowing recovery of the principal, fees, and court costs.

Security Measures

Individuals and businesses can implement personal protections to safeguard cheques against theft and unauthorized use. Secure storage practices include maintaining a "clean desk" policy, restricting access to cheque stock through segregated duties, and using locked cabinets or safes to prevent internal or external theft. ^[163] For businesses, positive pay systems provide an automated layer of defense by requiring the issuer to upload details of issued cheques—such as check number, amount, date, payee name, and account number—to the bank, which then matches these against presented items and flags discrepancies for review. ^[164] This service helps prevent alterations or counterfeits, with banks reporting average fraud losses of around $1,500 per incident, though it requires timely submission to avoid processing errors. ^[164] Banks employ verification protocols to authenticate cheques before processing, involving checks for completeness, signatures, dates, and security features, often using automated systems that cross-reference account details and real-time data. ^[165] AI-driven detection enhances these protocols by analyzing anomalies in cheque images, such as irregular patterns or alterations, using machine learning to flag potential fraud with high accuracy and reducing manual review needs. ^[166] Watermark validation is a key physical check, where tellers or scanners confirm intricate, light-sensitive designs embedded in the paper, visible under ultraviolet light or angled viewing, to verify authenticity and deter replication. ^[167] Emerging technologies include blockchain pilots for digital cheques, which use decentralized ledgers to issue, validate, and clear transactions immutably, incorporating cryptography, OTP verification, and fraud prediction algorithms achieving up to 80% accuracy in anomaly detection. ^[168] Mobile deposit security features limits on transaction amounts, such as daily or monthly caps, combined with image validation, encryption, and multifactor authentication to minimize risks during remote processing. ^[169] Legal safeguards in the United States are provided by the Uniform Commercial Code (UCC) § 3-417, which imposes presentment warranties on those seeking payment, ensuring the cheque is unaltered, signatures are authorized, and the presenter is entitled to enforce it, allowing drawees to recover losses plus expenses from warrantors. ^[170] In the European Union, the Payment Services Directive (PSD2) establishes frameworks for secure payment authentication and incident reporting, though it excludes paper cheques; it mandates strong customer authentication and fraud monitoring for electronic equivalents, influencing broader cheque-related protections. ^[171] Best practices emphasize avoiding post-dating cheques, as banks may process them prematurely, leading to overdrafts or fees, and instead opting for electronic payments or payment plans for reliability. ^[172] For high-risk transactions, such as large amounts or unfamiliar parties, alternatives like wire transfers, automated clearing house (ACH) payments, or virtual cards are recommended to reduce exposure while maintaining efficiency. ^[172]

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1. Write the date. The date is usually the day you're writing the cheque. You need to include the day, month and year so there's no confusion.Why do you need to know how... · How to address a cheque
[50]
Check Writing & Cashing - HelpWithMyBank.gov
Endorsing Checks If a check is issued to two people, such as John and Jane Doe, the bank generally can require that the check be signed by both payees before ...Missing: process cheque
[51]
31 CFR Part 240 -- Indorsement and Payment of Checks Drawn on ...
(i) The check is indorsed by the payee in a form recognized by general principles of law and commercial usage for negotiation, transfer or collection of ...Missing: cheque | Show results with:cheque
[52]
What Is a Crossed Check? Definition, Benefits, and Usage Explained
Like an uncrossed check, a crossed check can't be transferred to a third party if the payer has written "not negotiable" or "account payee only" on the check in ...What Is a Crossed Check? · How It Works · Crossed Check Compared to...
[53]
What Does 'A/C Payee Only' Mean on a Cheque? - Evinco Software
"A/C Payee Only" means the cheque can only be deposited into the specified payee's bank account, preventing misuse and ensuring funds go to the right person.<|separator|>
[54]
How long are cheques valid for? - NatWest
If you have a cheque dated 6 months or more ago it may not clear and you should contact the issuer of that cheque and ask for a replacement.
[55]
Check Services - Federal Reserve Board
Jun 16, 2016 · Most checks are collected and settled within one business day. The number of checks written nationally has been declining since the mid-1990s as ...
[56]
[PDF] Payment, clearing and settlement systems in the United Kingdom
Paper credits follow a reverse process to cheques, in which the collecting bank is generally the payer's bank. The processing procedures for the credit clearing ...
[57]
Use of Lockbox Services - Government Finance Officers Association
Lockbox services are designed to expedite the collection of paper-based payments and provide timely payment information to update accounts receivable records.Missing: aba. | Show results with:aba.
[58]
[PDF] Payment, clearing and settlement systems in the United States - CPSS
cheque with electronic payment information at some point in the collection process. ... CHIPS Rules are posted on the CHIPS website at http://chips.org. 18.Missing: federalreserve. bankofengland.
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A Guide to Regulation CC Compliance - Federal Reserve Board
Aug 6, 2024 · This guide is intended to help financial institutions comply with Regulation CC, Availability of Funds and Collection of Checks.
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Payment and settlement | Bank of England
Oct 2, 2025 · The Bank of England acts as a settlement agent to enable financial institutions to make payments to each other.Missing: bis. | Show results with:bis.
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Cashier's Check vs. Certified Check | PNC Insights
Jul 10, 2024 · Both cashier's checks and certified checks are considered "official checks." They're both offered by banks and credit unions, usually for a fee.
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Cashier's Check Vs. Certified Check: What's The Difference?
Jul 28, 2025 · A cashier's check is backed by the bank's or credit union's funds, whereas a certified check is drawn from the buyer's personal account.What is a cashier's check? · What is a certified check?
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12 CFR Part 229 -- Availability of Funds and Collection of Checks ...
This section requires banks to use a standard form of indorsement when indorsing checks during the forward collection and return process. It is designed to ...
[64]
Certified Check: Meaning, Overview, History - Investopedia
A certified check is a type of check for which the issuing bank guarantees that enough cash will be available when the recipient decides to use the check.
[65]
Cashier's Check vs. Certified Check: What's the Difference? - KeyBank
While both offer security, a cashier's check involves the bank's direct liability, whereas a certified check relies on the payer's available funds.
[66]
What Is a Bank Draft? Definition, How It Works, and Example
Aug 8, 2025 · Unlike personal checks, a bank draft involves transferring money to the bank's reserve account, so the bank essentially becomes the payer. ...Bank Draft: An Overview · The Mechanics of a Bank Draft
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What is a Bank Draft and How Does It Work? - BILL
With a bank draft, the bank issues the draft to the payee, but on the behalf of the payer. This means the sender's name and information is on the bank draft.What is a bank draft? · How do bank drafts work? · What is the difference between...
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TD Explains: How do bank drafts work?
Dec 13, 2018 · Unlike a personal cheque, a bank draft is guaranteed by the financial institution, so the person to whom the bank draft is payable is sure ...
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What are Bank Drafts? A Brief Guide! - EasyFX
Real Estate Transactions. When purchasing property domestically, or overseas, Buyers often use bank drafts to pay deposits or closing costs.
[71]
Bank Draft vs. Certified Cheque vs. Money Order - NerdWallet
Mar 4, 2025 · A bank draft is a secure, physical form of payment to a third party that is guaranteed by the issuing bank or credit union. It's available in ...Missing: explanation | Show results with:explanation
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Difference Between Bank Draft and a Certified Check - PostGrid
Jul 13, 2025 · A bank draft is a payment tool a bank may provide when asked by the person receiving the payment. However, there is no certainty with checks ...Difference Between a Bank... · What is a Certified Check? · What is a Bank Draft?Missing: explanation | Show results with:explanation
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California Labor Code § 226 (2024) - Justia Law
An accurate itemized statement in writing showing (1) gross wages earned, (2) total hours worked by the employee, except as provided in subdivision (j), (3) ...
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What is a Pay Stub? Everything You Need to Know - ADP
Pay stubs, also known as pay statements or wage statements, are like the decoder rings of payroll. They help employees decipher their paychecks and are useful ...
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State-by-State Pay Stub Requirements - PrimePay
Jun 30, 2023 · According to the Fair Labor Standards Act (FLSA), employers are not required to provide employees with pay stubs.
[76]
China - Corporate Information Company History - American Express
American Express began as a freight company in 1850, invented the Travelers Cheque in 1891, and introduced the Personal Card in 1958. It is now a global ...
[77]
American Express | National Postal Museum
Berry designed a Travelers Cheque that was protected against loss, theft and fraud. The innovative design featured a counter-signature system and a watermark ...
[78]
Form 10-K - SEC.gov
We have been in the business of issuing and selling travelers checks since 1891. We sell the American Express® Travelers Cheque (“Travelers Cheque” or “Cheque”) ...<|separator|>
[79]
Warrants & NET Transactions | TFX - Treasury Financial Experience
The appropriation warrant is evidence of Congressional action to fund programs. In addition, an appropriation warrant serves to establish the amount and period ...
[80]
Warrants | Office of the Washington State Treasurer - | WA.gov
A warrant is a legal, negotiable instrument drawn against the state treasury in place of a commercial bank. A warrant acts like a check and can be cashed or ...
[81]
Warrants - TexPayment Resource - FMX | Fiscal Management
A state check is called a warrant because the State Treasury guarantees payment. The Comptroller's office promises or warrants that funds will be available.
[82]
[PDF] Legal Aspects of Postal Money Orders
The postal money order, sales of which in recent years have averaged. 243 million annually, looms as an unwelcome, nonnegotiable fellow traveler of checks and, ...
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Oct 29, 2025 · Yes. A money order is a prepaid negotiable instrument recognized under U.S. law as a valid and enforceable form of payment. How do I fill out a ...
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Custom Oversized Checks | Giant Checks For Events & More
In stock Rating 5.0 (2) Professional custom giant checks made from 3/16" foam board with dry-erase. Great for fundraisers, charitable functions & marketing events!Missing: non- | Show results with:non-
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Custom Giant Checks for Donations, Events & More | Signs.com
In stock Rating 4.6 (244) Professional giant checks made from 3/16" thick paper-faced foam board. Fully customizable and great for contests, donations & other marketing events.Missing: lottery | Show results with:lottery
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What a Voucher Is and How It Is Used in Accounting - Investopedia
A voucher is a document that records a liability or allows for the payment of a liability or debt that's held by the entity that will receive the payment.
[87]
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A voucher is often a prenumbered form used in the accounts payable department to standardize and enhance a company's internal control over payments.
[88]
Crossed Cheques - Bills of Exchange Act 1882 - Legislation.gov.uk
A cheque may be crossed generally or specially by the drawer. (2) Where a cheque is uncrossed, the holder may cross it generally or specially.
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None
### Cheque Usage in the UK (2024 and Projections)
[90]
Standards Advisory: Magnetic Ink Still Required on Checks
MICR ink is still required for printing machine-readable code lines along the bottom of checks. MICR, short for Magnetic Ink Character Recognition, is a core ...
[91]
§ 4-404. BANK NOT OBLIGED TO PAY CHECK MORE THAN SIX ...
A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six months ...Missing: 3 21 magnetic<|control11|><|separator|>
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Legal Risks of Postdating a Check - Nolo
Understand the legal and financial risks involved with postdating a check. Learn how to protect yourself and when criminal and civil penalties may apply.Missing: variations | Show results with:variations
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[PDF] Canadian Payment Methods and Trends: 2019
Is cheque imaging slowing the decline? Find out ... Seven out of 10 cheques exchanged between. Canadian financial institutions were sent as images in 2018.
[95]
Paying by cheque - Canada.ca
Financial institutions usually consider a cheque stale-dated after 6 months, unless it's: a certified cheque, or. a Government of Canada cheque.
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Jun 15, 2017 · Cheque use in Australia has declined significantly over the past few decades and currently represents only a small share of non-cash payments.
[98]
Cheques still allowed at big banks | RNZ News
May 17, 2019 · The largest bank ANZ said there had been a year-on-year 20 percent decline in cheque use in 2017 and 2018, with less than 1 percent of customers ...<|control11|><|separator|>
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Exploring the use of cheques in New Zealand - Payments NZ
Since 2004, the number of cheques issued in New Zealand has declined by 10 per cent every year. Chief Executive Steve Nichols said that cheque usage is likely ...Missing: 1% Act
[100]
[PDF] 1 THE NEGOTIABLE INSTRUMENTS ACT, 1881 - India Code
[9th December, 1881.] An Act to define and amend the law relating to Promissory Notes, Bills of Exchange and Cheques. CHAPTER I PRELIMINARY 1. Short title.— ...
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Why cheques are becoming obsolete and what India can learn from ...
Aug 18, 2025 · ... cheque usage in business-to-business transactions. 2️⃣ Incentivize ... 3️⃣ Educate users in rural and semi-urban areas where cheques are still common.
[102]
Consequences of Cheque Bounce Notice - ClearTax
Sep 24, 2025 · A cheque bounce is an offence under Section 138 of the Negotiable Instruments Act, 1881. The punishment can be: A fine of up to twice the cheque ...What is a Cheque Bounce? · Issuance of Cheque Bounce... · Format
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[PDF] offences under section 138 of negotiable instruments act - S3waas
Sep 28, 2024 · 2. Cheque must be presented within 3 months or within validity period whichever is earlier. The Reserve Bank of India vide Notification No, ...
[104]
[PDF] Payment, clearing and settlement systems in Japan
bills and cheques, which utilise deposit accounts for payment, are governed by the Bill Act and the Cheque Act. In addition, electronically recorded ...Missing: preference forgery
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Japan's shift to cashless society prods BOJ call for payment innovation
Jun 10, 2025 · Once seen as a society favouring physical currency, Japan saw the ratio of cashless payments rise to 42.8% in 2024, up from 13.2% in 2010 and ...
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[PDF] COUNTRY ADDENDUM JAPAN
The Bank is not responsible for any damages arising from forgery, alteration, or other wrongful acts in respect of checks, promissory notes, bills of exchange, ...
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[PDF] CPSS Publications - Payment systems in Israel - Sep 2000
According to this Law, a cheque is defined as returned if it is not paid because of insufficient cover and the bank is not obliged to pay it by virtue of an ...
[108]
Check Writing in Israel - Voleh Organization
Dec 30, 2009 · In checks such as the pre-crossed one, no changes can be made (can't be corrected – just write a new check), except changes in the date or in ...
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[PDF] Overview of the Payments System in Israel
ZAHAV, a critical real-time gross settlement (RTGS) system that makes intraday payment settlements, is the major system that supports the economy's payments ...Missing: cheque | Show results with:cheque
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[PDF] poland-civil-code.pdf - Blackbaud
This Code governs the civil law relations between natural and legal persons. Art. 2 (deleted). Art. 3. No retroactive effect. The law has no retroactive.Missing: presentment | Show results with:presentment
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[PDF] Payment and securities settlement systems in the European Union
Aug 15, 2007 · This fourth edition takes account of the fundamental changes in payment and securities settlement systems which have taken place in the period ...
[112]
Statutory interest and payment terms in Polish law
Feb 28, 2016 · If the payment term stipulated in the contract is longer than 30 days, the creditor may demand for statutory interest to be paid after the lapse ...Missing: cheque day presentment low usage
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[PDF] Payment, clearing and settlement systems in Turkey - CPSS
The Law on the Central Bank of the Republic of Turkey (CBRT Law) (Law No 1211 ... The Turkish Commercial Code and the Cheque Law govern all aspects of cheque ...
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Latest Amendments to the Turkish Commercial Code and the Law ...
Such monetary fine cannot be less than the total of the dishonored amount of the cheque, the accrued interest and litigation expenses. The court shall also rule ...Missing: usage | Show results with:usage
[115]
Regulations Brought By The New Cheque Law - Turkey - Mondaq
May 30, 2012 · For each cheque in question, a prison sentence of one year can currently be applied to the person who issues bearer cheques without using the ...Missing: dishonour | Show results with:dishonour
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Cheque usage in 2010 actually went up by 1 percent, as the improved transaction speed made it much more viable for everyday transactions – a trend we often see.
[117]
Global Data Tracks Decade-Long Decline in Check Payments
Aug 14, 2023 · The United States was down 6.7 percent per year from 2012 to 2021, compared to down 8.8 percent per year for Canada at the slow end and down ...
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Apr 10, 2025 · EFT enables the transfer of funds electronically from one bank account to another, eliminating the need for physical checks. This revolutionized ...
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According to Deloitte, RTP could pull almost $19 trillion in B2B payments away from ACH and paper checks by 2028.
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75% of Companies Still Use Paper Checks Despite High Cost
ranging from $4 to $20 per check — exceed the minimal cost of digital transactions, which ...
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Oct 17, 2025 · “This decline has been driven by both the introduction of fees for cheque usage, as well as the growing adoption of convenient e-payment ...
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Making the Switch: Moving from Checks to Digital Payments
May 17, 2024 · Digital payments are more efficient, less costly, and less vulnerable to fraud than checks. They also improve cash flow and optimize working ...
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Jul 13, 2023 · And they're right. Digital payment methods are more secure than traditional check payments because they are protected by multiple layers of ...
[124]
Many Americans Believe Checks are More Secure Than Digital ...
Many Americans are also still under the mistaken impression that checks are more secure than digital payments, peer-to-peer platforms, and ACH transfers...
[125]
Companies Stick with Check Payments, Despite Fraud Risk
Jun 18, 2025 · Digital alternatives are more secure. ACH transfers, wire payments and real-time payments offer stronger encryption and better fraud detection ...
[126]
Millennial and Gen Z Digital Wallet Preferences - One Inc
Feb 23, 2023 · Payment Methods Have Changed In contrast, many younger people, including younger Millennials and Gen Zers, don't use checks at all. In fact, ...Missing: demographic cheques
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Jan 18, 2024 · A recent EY survey revealed that Gen Z leads the generational pack in adopting digital payment methods. Gen Z prefers quick, easy payment ...
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Gen Z and the Future of Payments: Cards, Cash, and the Shift to ...
Sep 16, 2024 · See how Gen Z is transforming payments with a strong preference for digital wallets, contactless cards, and mobile payments over cash.
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The Environmental Impact of Digital Payments - XPay Egypt
Traditional payment methods, like cash and paper-based transactions, have long contributed to waste and carbon emissions, making digital payments a more ...A Greener Way To Transact · Reducing Paper Waste And The... · How Xpay Is Contributing To...
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BNY Mellon Drives Industry Reduction in Paper Checks as ...
Apr 26, 2022 · Clients have already reduced the amount of checks they send to BNY Mellon for processing by 3% in 2020 and by 8.5% from 2019 levels, with those ...Missing: factors decline
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Judging the Environmental Impact of Check 21, Nearly Two ...
Electronic check processing has reduced carbon emissions by millions of tons since replacing the old air and ground transport network used to exchange paper ...
[132]
Commercial Checks Collected through the Federal Reserve--Annual ...
Jan 27, 2025 · In 2024, there were 2,978 million commercial checks collected, valued at 8,173 billion dollars, with an average daily volume of 11.9 million ...Missing: 23 3.5
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Nacha Supports Executive Order to Eliminate Federal Check ...
Jul 2, 2025 · Nacha · Nacha Supports Executive Order to Eliminate Federal Check Payments, Citing Cost Savings and Fraud Reduction · Nacha.
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[PDF] CANADIAN PAYMENT METHODS AND TRENDS REPORT 2024
Specifically, the year-over-year decline in cheque volume was 26 per cent in 2020, six per cent in 2021 and. +0.2 per cent in 2022. For 2023, the volume of ...
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[PDF] Use of Checks in Selected Countries
Jul 14, 2023 · This report presents a snapshot of check use as a means of payment in 20 countries from 2012 to 2021. Using charts and tables, ...Missing: 2010 | Show results with:2010
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Oct 30, 2017 · The UK is beginning the phased roll out an image-based cheque clearing system that will slash processing times from six 'weekdays' to one day ...Missing: 1.2 billion 2000
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Jul 23, 2025 · Statistics are also collected for cheques, money remittances and other payment services, which together accounted for around 1% of the total ...
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Oct 23, 2025 · India's rapid shift towards digital payments gathered further pace in 2025, with cheques now accounting for less than 3% of all transactions ...Missing: statistics | Show results with:statistics
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There has been an almost 90 per cent decline in the use of cheques in the past 10 years, as people and businesses have swapped to more convenient and faster ...
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ACH transfers use a network, are slower, and have lower fees. Wire transfers are direct, faster, and have higher fees. ACH is for everyday transactions, wire ...
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Feb 4, 2025 · ACH transfers are typically free but slower, while wire transfers are faster but more expensive and not protected by EFTA.<|separator|>
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A wire is the simplest global payment method because it requires no middleman to handle the transfer, and the fastest method, as funds are received by the payee ...
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Jul 30, 2025 · 1The number of digital wallet users worldwide surpassed 5.6 billion in 2025, with the strongest growth seen in Asia-Pacific and Latin America.
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75+ Important Online Payment Statistics, Data, and Trends (2025)
Jan 30, 2025 · 6. In the United States, PayPal dominates digital wallet usage (36%), while Apple Pay (20%) and Venmo follow (16%).
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Jul 31, 2025 · The decline of consumer checks at retail point-of-sale has been one of the most significant factors in the reduction of check usage over the ...
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Apple Pay and Other Digital Wallets Market Share in 2025
Feb 18, 2025 · More than 5.2 billion people now use digital wallets, accounting for over 60% of global e-commerce transactions.Missing: Venmo | Show results with:Venmo
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In India, the Unified Payments Interface (UPI) has become a leading payment system – processing more than 13 billion transactions per month as of March 2024.
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[PDF] UK account-to- account payment infrastructure | EY
The modernisation of real-time payment systems is a key driver for increasing both the volume and value of cashless transactions. Sophisticated payment ...
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Feb 16, 2025 · The Check 21 Act introduced the concept of substitute checks. These are paper copies created from digital images of the original checks. If a ...
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Check Fraud: What It Is, Common Types, + Real-Life Examples
Check fraud is the use of paper or digital checks to illegally gain money. This is commonly done by forging an account holder's signature on a stolen check.Check Fraud · Check Forgery · Check CounterfeitingMissing: mechanisms | Show results with:mechanisms
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Check Washing – United States Postal Inspection Service
Jul 29, 2025 · Check washing scams involve changing the payee names and often the dollar amounts on checks and fraudulently depositing them.Missing: mechanisms signatures
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Fraudulent checks come in different forms and can typically be categorized as counterfeit, altered/”washed,” and checks with forged endorsements. These types ...Missing: mechanisms | Show results with:mechanisms
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Jan 16, 2025 · Check fraud techniques include forgery, counterfeiting, check kiting, check cooking, and check washing.Missing: mechanisms signatures
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Fraudsters tamper with checks to change the appearance of crucial details. This includes using chemical solvents or abrasive tools to erase and replace the ...
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Sep 5, 2024 · This blog examines the increasing threat of employee check fraud, highlighting two significant check fraud cases involving industry leaders ...
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Check fraud is simply using checks to commit fraud. Among the types of check fraud are: Forged Signature – signing a check without authorization or endorsing a ...Missing: cheque cheques
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Sep 2, 2024 · In 2023, check fraud resulted in over $1.3 billion in losses for financial institutions across the United States, according to reports from the ...Missing: pre- | Show results with:pre-
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A bounced check, also called a rejected or rubber check, occurs when a check can't be processed due to insufficient funds or other issues.Missing: dishonour | Show results with:dishonour
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Checks may be dishonored due to a signature mismatch, overwriting, or a stale date. Legal remedies can be taken only if a clear case of cheating is proven. How ...Missing: cheque dishonour
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ACH return codes indicate why an ACH transaction can't be completed, such as invalid details or insufficient funds. Learn their meanings and fixes.
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Section 138 in The Negotiable Instruments Act, 1881 - Indian Kanoon
138. Dishonour of cheque for insufficiency, etc., of funds in the account.— · (a)the cheque has been presented to the bank within a period of six months from the ...
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From forged, missing or improper check endorsements to mobile deposit fraud, learn how to protect your business against check fraud.
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Aug 23, 2025 · Positive pay ensures that any suspicious checks are flagged and reviewed before processing, helping companies safeguard their finances ...
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Jul 2, 2025 · Call and verify the check directly. Contact the bank and request a verification. You'll usually need: Account number; Check number; Check amount.
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### Summary of Cheque Watermarks and Security Features
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Aug 8, 2024 · This innovative approach incorporates blockchain technology to enhance the security and efficiency of the cheque clearing process, while also ...Missing: pilots 2020s limits<|separator|>
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(2) The person making payment may recover from any warrantor for breach of warranty an amount equal to the amount paid plus expenses and loss of interest ...Missing: EU services directive safeguards
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Directive - 2015/2366 - EN - Payment Services Directive - EUR-Lex
Summary of each segment:
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Postdating a check is generally not recommended because of the potential risks. For instance, banks may still cash postdated checks before the written date, ...