Have you ever wondered how people started to use checks? Learn a little more about the checks you use and how it became one of the most used ways of payment.
Cash is the universal way of paying, but it is not always the safest. There are businesses, elites, and even common folks who still prefer getting paid or paying in checks. How checks did came to be? Who and where did the first checks come from? These curious yet important questions can be answered in this blog- and you’ll be more convinced to use those checks more!
- Checque, cheque or Check?
There are several ways to spell checks, and all of them are correct. These terms are used from the 17th to the 20th century. Today, the word “checks” are often used in American English, while “cheque” is used by other countries. The terms have the same financial meaning- to “check or control against forgery”. So whatever spelling you prefer, you are doing it right!
- Romans are First!
The use of checks came as early as the 1st Century BCE by no other than Romans. Romans used an early form of check called praescriptiones. However, there are records that show the idea of checks came in an earlier period. These records include transactions with letters of credit started in India from 321 BC to 185 BC.
- The Bank of England
The modern use of checks was introduced by the Bank of England in 1717. The bank used the pre-printed form of checks and was the earliest effort to avoid fraud. A person needs to attend personally in the bank to get numbered check paper from the cashier. Written checks were then returned to the bank for settlement. It was also in England where the exchange of checks and clearing of checks took place.
- Arriving in the USA
It was not until 1784 that the Bank of New York formally introduced the use of checks. However, there are claims that checks were used in the USA as early as 1681 by businessmen in Boston. They are said to mortgage their lands to fund their businesses, writing checks in exchange.
- Where Checks are Now
Perhaps the most notable improvement on checks were the use and standardization of the machine-readable characters or MICR. This was patented in the US in 1959, creating the opportunity for the first automated check readers or sorters. These machines are used in clearing checks and were essential in the growth of the use of checks. By the 1980’s checks are at the highest use in most countries.
Although checks are supposed to be safe against fraud, there are still many cases of fraud worldwide. Banks and other financial institutions have created methods in order to secure check payments and provide a safer way to pay and get paid. Despite the modern use of credit or debit cards, millions, or even billions, are still being transacted with checks every year. And this method of payment will still be around for many years to come.