June 29, 2020 by Adam Malik
Sending paper cheques may soon be a thing of the past — and it could be thanks to COVID-19.
The global novel coronavirus pandemic that shut down many businesses and forced much of the workforce to operate out of their homes has created a digital push in many aspects. But when it comes to premium payments or issuing rebates, paper cheques were still being sent out — meaning someone had to write a cheque, put it in an envelope, mail it and have the item handled by postal employees before it landed in the hands of the intended recipient.
In an era where emphasis is placed on limiting physical contact with people and non-personal items, cheques seem out of place.
“I think we were moving in that direction,” said Nancy Babeu, regional sales director of Primaco, a premium financing company, in reference to eliminating paper cheques and moving to digital payments. “It was kind of going in that direction: Clients were wanting it; some brokers were wanting it. But I think with the reality of what just happened [with COVID-19], it kind of pushed forward much quicker.”
There have been systems in place to work electronically, she noted as a panellist during Canadian Underwriter’s webinar, COVID-19 and the Economy: Protecting Your Receivables, whether it be payment requests or digital signatures. In a pandemic world, using such technologies have been pushed to the forefront “because you can’t go to your brokerage office and sign the contract. Or, if you mail the cheque, it’s [taking] much longer. It’s an issue because there’s no one at the office to receive it,” Babeu said.
“So it was there. It was coming. I think it just pushed us along much quicker and it will just keep evolving because it’s where we’re going and where people want [to be].”
Commercial businesses and those in business-to-business dealings have been accelerating the use of digital payments, said panellist David Dienesch, board chair of the Receivables Insurance Association of Canada and president and chief agent of Euler Hermes Canada. “Without a doubt, we’re getting certainly more of our clients not sending us cheques anymore.”
The pandemic has forced needed change that may have sat on the sidelines previously, said panellist Karen Ritchie, president of Toronto Insurance Council and vice president of Baird Macgregor Insurance Brokers LP.
“I think [the pandemic] put more emphasis on, ‘Let’s move the needle along quicker. Let’s get moving faster in that direction,’” she said. “I think we’ve been talking about it and trying to get there. But once we were forced into the situation, I think we realized we’re further along than we thought we were in being able to work digitally. So I think it’s both — I think clients have wanted it and brokers and insurance companies as well. I think it’s really helped to move the needle along a little bit quicker.”
If something good has come out of the COVID-19 pandemic, it’s this change in particular, Babeu said. “Cheques are looking like they’re going to be more and more a thing of the past so the electronics and online and all of those types of payment systems are going to get more and more headway, she said. “It’s going to be the norm, even when we get back to what we think is a normal type of situation.”
Feature image by iStock.com/payphoto