In the 2025 AFP Payments Fraud Survey, 63 percent of organizations reported attempted or actual fraud through checks. That is the highest rate of any payment method, by a wide margin. ACH attempted or actual fraud came in at 38 percent.
Committing check fraud is easy when you consider that you are sending, through the mail, a piece of paper that has your company’s name, address, bank, and bank account number. But, in that same body of research, 75 percent of organizations said they have no plans to eliminate checks in the next two years.
Read those two findings together. The industry knows which instrument is being attacked, and the industry is keeping it anyway.
The Direct Cost Is Worse Than It Looks
The median cost to issue a single check runs $2.01 to $4.00 once you count check stock, printing, envelopes, and postage. The party receiving it spends another $1.00 to $2.00 processing and depositing it.
An ACH transaction costs $0.26 to $1.00. That is an 80 to 90 percent reduction on the same payment.
Run it against a real disbursement volume. An agency issuing 500 checks a month at a conservative $3.00 each spends $18,000 a year moving money. The same volume by ACH costs roughly $2,400. The difference is not a line item worth optimizing, it is a headcount.
And that arithmetic excludes labor entirely.
The Labor Cost Nobody Tracks
Walk the actual process. Someone prints the check. Someone applies a signature, or two signatures if your controls are sound. Someone stuffs and meters the envelope. Someone logs it. Weeks later someone chases it because the payee says it never arrived. Someone requests a stop payment. Someone reissues it. Someone reconciles all of it against a bank statement.
None of those steps appear in the $3.00. All of them consume escrow accountant hours, which is the scarcest labor in most agencies.
Then there is the tail. Uncashed trust checks age into stale dated items, and stale dated items age into unclaimed property exposure and state audit findings. A category of work that simply does not exist when the disbursement was electronic.
Why Checks Attract Fraud
A check is a physical document that carries your trust account number and routing number on its face, printed in the clear, and then travels through the mail.
That is the entire vulnerability. It is not sophisticated. Checks get intercepted from mailboxes and collection boxes, the payee line gets chemically washed and rewritten, and the altered instrument gets deposited somewhere that will not look closely.
The volume is not theoretical. Check fraud accounted for roughly 7.5 percent of the record 2.19 million suspicious activity reports that banks, savings associations, and credit unions filed in 2025.
Escrow accounts are a particularly attractive target. Balances are large, disbursements are frequent, and the payee mix rotates constantly, which makes an unfamiliar name harder to spot.
Then there is who absorbs the loss. Under the Uniform Commercial Code, allocation turns on whether each party exercised ordinary care and whether the customer reported the problem within the notice window. An agency that reconciles monthly rather than daily can find itself outside that window without ever realizing the clock was running.
Why ACH Is Structurally Safer
ACH is not safer because it is newer. It is safer because of how it is built.
An ACH payment is an encrypted data file moving between verified financial institutions inside a closed, regulated network. Your account number is not printed on anything and does not pass through anyone’s hands. Every transaction routes through the Federal Reserve or The Clearing House under federal regulation.
The network also keeps hardening. Nacha’s risk management framework taking effect in 2026 requires financial institutions to actively monitor outbound ACH payments for the first time. That is an entire layer of institutional fraud detection sitting on top of your payments, and paper checks have no equivalent.
None of this makes ACH immune. Business email compromise still works by convincing a human to send a legitimate payment to a fraudulent account, and that risk follows the payer, not the rail. Which is why account validation and continuous financial monitoring matter regardless of instrument.
The Honest Comparison
| Paper check | ACH | |
| Cost to issue | $2.01 to $4.00 | $0.26 to $1.00 |
| Settlement | 5 to 7 days | 1 to 3 days |
| Organizations reporting fraud, 2024 | 63 percent | 38 percent |
| Account data exposure | Printed on the instrument | Encrypted, bank to bank |
| Reconciliation | Manual matching, float, outstanding items | Structured data, automatic matching |
| Unclaimed property tail | Yes | No |
The gap is not close on a single row.
What to Do With This
Start by quantifying your own position rather than accepting an industry median. Pull last quarter’s disbursement count, split it by payment type, and apply the AFP benchmarks. Most agencies are surprised by the annual figure.
Then look at which disbursement categories genuinely require paper. For most agencies the honest answer is very few.