How SoCalGas Eliminates 50,000 Checks With Digital Payouts

The finance industry often focuses on the visible costs of disbursements, such as printing, postage and fraud losses. However, according to Theresa McEndree, chief growth officer at Choice Digital, the recipient experience is one of the highest hidden costs of legacy disbursement programs. The Tracker by PYMNTS Intelligence Embedded Finance emphasizes that the cost of slow disbursements extends beyond paper and delays, encompassing customer trust, operational complexity and potential revenue opportunities.

Choice Digital has worked with Southern California Gas Company, which eliminated approximately 50,000 paper rebate checks annually by transitioning to digital payouts. This shift resulted in immediate savings from reducing paper expenses, as well as long-term operational benefits such as simplified reconciliation and the elimination of unclaimed-property obligations.

McEndree stresses that the most significant overlooked aspect is the recipient experience. Younger recipients view mailed checks as a sign of outdated processes, while underbanked consumers may be forced into inefficient payment methods. Research by Choice Digital shows that 94% of recipients desire payment choice, and 57% would be dissatisfied receiving a paper check instead of a digital option.

McEndree argues that organizations often overlook the importance of recipient experience when making payment decisions. Instead of relying solely on industry benchmarks, finance teams should examine their own data on payment preferences, time to funds, exception rates, reissues and unclaimed-property volume. By calculating the true cost of paper checks, including labor, support calls and administrative effort, organizations can better understand the hidden costs of traditional disbursement methods.

McEndree emphasizes that the key question is not merely check versus digital, but which payment options organizations actually provide. Offering a variety of payment methods can significantly influence recipient behavior. Choice Digital's data demonstrates that expanding available payment options can alter how recipients choose to receive smaller payouts.

Ultimately, successful modernization efforts require a balanced approach that combines financial data on savings with insights into recipient behavior and experience. McEndree concludes that the numbers can initiate the conversation, but real-world recipient outcomes are crucial in convincing organizations to adopt modern payment solutions.