How does the banking system deal with cheque transactions so efficiently?*
Banking system handles cheque transaction very efficiently – and accurately – due to a combination of old business processes and old software that harken back to an era when there was a premium on rigor and rigidity, getting things right the first time, thorough testing in order to avoid bugs and rework as far as possible, tough audits, and so on.
Except perhaps Europe, the zeitgeist has now shifted to flexibility, “move fast and break everything” ethos, “first past the post wins” credo, “manage audits” best practice, and so on, which perhaps explains why digital payments have a higher failure rate compared to cheque payments. Ketharaman Swaminathan’s answer to What are some of the reasons as to why online payments fail often? Of course, digital payments have many advantages over cheque payments such as realtime settlements, 24*7*365 availability, far wider target market, arguably superior UX, etc.
Just to be clear, I’m not advocating a return to the bygone era or the adoption of the European way in other countries. All I’m doing is answering the asked question to the best of my knowledge.
*: This is the original question I answered. I’m repeating it to help me make sense of my answer in case it’s moved to / merged with some other question that I didn’t answer.