As the April 15 tax deadline looms, I did what I always do this time of year; I took out my checkbook and wrote a check to the IRS, the State of Ohio and my city. This is typically the only time in the year I write checks. I opened my checking account over 15 years ago and I am still on the first pack of checks. According to a survey conducted by YouGov and ACI, I am not the only one who still writes checks for taxes:
Despite the continued evolution of payment technology, nearly a third of Americans opted to write out a check and physically mail it, which takes more effort than an electronic funds withdrawal, debit or credit card payments,” said Andrew Sajeski, leader, biller solutions, ACI Worldwide. “Paying by cash or check tends to take longer, and leaves the taxpayer at risk of being late, leading to additional interest and penalty charges. Moreover, if the check gets lost in the mail or stolen, the consumer’s personal information can be violated. It’s much easier and safer to set up an electronic funds withdrawal.”
So why do I and a third of the population still take the time and run the aforementioned risks to write checks for taxes? Government entities and municipalities were late to the electronic money movements, so while utilities, financial services providers and other billers were quick to see the benefits of digital payments, government still insisted on checks. So the habit of writing checks persisted. But taxing authorities and government entities have come a long way and the opportunity to pay electronically is readily available.
Here are some more details around tax payments from the study:
- When it comes to paying taxes, 23 percent of U.S. adults chose electronic funds withdrawal, with 12 percent paying by debit card, and 11 percent opting for credit card payment
- Of those who mailed in a check (29%) to pay taxes, Millennials (12%) were much less likely to do so than Generation X (28%) and Baby Boomers (43%)
- For tax refunds, a whopping 71 percent of taxpayers would choose Direct Deposit followed by 19 percent who opted to receive a check in the mail
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group