How do bank Cheques work? How can a bank accept one from another bank, whilst having different standards, shapes, paper material? How is forgery not rampant?

Question

I cannot wrap my head around the security of Cheques. They have been around since forever (and I still don’t get how they got verified, although I can understand that fraud could have been way higher back then).

Is there a unified standard for them? Or a proof that it is valid from the government?

In: Economics

Answer 1

Someone already discussed the clearing house, so I want to say something different.

You could theoretically make your own checks, written by hand, on anything you like. There’s nothing that says that only checks printed by your bank are the only checks that will work.

The important part of the checks are the account and routing numbers. You could write those on a napkin and use that napkin as a check. The bank would still be able to process your homemade check and conduct the money transfer.