The first iterations of modern-day checks emerged ages ago. The behind-the-scenes banking practices and legal precedence supporting check-writing have evolved over the years, though the basic concept of making a written promise of payment has remained the same.
As we close out yet another incredible year, let’s reflect back on the long and storied timeline of how we ended up with the modern version of checks we rely on today.
The First Version of a “Check”
In a report by the Federal Reserve Bank of Atlanta, the earliest precursors to the modern check originated roughly one thousand years ago in the eastern Mediterranean region. According to the report, local merchants would prepare a written note instructing their bank to make a payment from their account to the intended recipient.
It’s thought that these written payment promises were introduced as a way to help reduce the burden and risk of carrying large amounts of physical currency from one place to another.
Introducing the Bill of Exchange
Europeans were eventually introduced to this idea of non-physical payment methods during the Crusades, as the Federal Reserve Bank of Atlanta reports. They were tweaked to accommodate the European banking system at the time, which led to the emergence of bills of exchange.
Bills of exchange facilitated international trade, enabling buyers to order payment at a separate time and place from where the actual payment would be remitted to the seller.
Formalizing the Check
Over time, checks became a more established and sophisticated form of payment, and banks began to establish clearing systems so they could be exchanged by customers of different institutions. This was an upgrade from checks’ ancient, handwritten origins, enabling secure and convenient transactions.
In fact, the modern version of the check we use today was first used in England in the late 17th century. At this time, banks like the Bank of England would provide standardized, pre-printed checkbooks for their customers to use.
During this era, checks became more popular among common folks for routine spending instead of being exclusively used for international business transactions of large amounts.
Cementing Check Usage in the United States
Expanding across the Atlantic, checks became a practical payment instrument for large transactions in the early days of the United States, as in other regions.
Checks became widely used across the country by the late 18th century. Their popularity was further supported by the passage of the Negotiable Instruments Law in 1881, which provided the standardized legal framework for accepted check usage and endorsement practices.
Ever since, checks have been a common payment instrument in the United States, with peak popularity in the 1990s, as reported by the Federal Reserve Bank of Atlanta.
Checks’ Enduring Popularity
While digital wallets and credit cards have become more popular over time, there’s no denying that checks remain a secure and reliable instrument for making payments in the modern era.
Checks themselves haven’t changed much over recent years, aside from continued innovation in security features like microprinted text and chemically sensitive paper to prevent fraudulent spoofing and unauthorized alterations.
Plus, most banks have evolved their procedures for the digital age through mobile check depositing features, enabling quick and easy deposits without needing to visit a bank. In fact, designs like mobile deposit checks make for an even more convenient online banking experience.
The usage of checks has ebbed and flowed over the years. However, reflecting on the centuries-long path it took to get to the modern version we use today is a good reminder of how this simple-seeming payment method has a long history behind it.
