The Business Risk of Escheatment—and How Digital Solutions Simplify Unclaimed Property Management

What happens when payout recipients leave their funds unclaimed? Depending on the type of payment program, businesses may be liable for escheatment or the process of turning over unclaimed property to the state. This complex and administratively burdensome responsibility poses risks to organizations that fail to adhere to state regulations and deadlines. Fortunately, companies can mitigate these risks by modernizing their payout processes with digital solutions that offer higher payment deliverability rates and a lower chance of abandonment than traditional methods such as checks.  

Switching to digital-led payouts and outsourcing your payment operations can protect your business from risk while improving operational efficiency and the recipient experience. Here’s how: 

Escheatment: a complex process  

According to the National Association of Unclaimed Property Administrators, only 20% of businesses are in full compliance with unclaimed property laws. Perhaps that’s because reporting abandoned property is notoriously complex. Escheatment laws and processes vary by state—your customer’s last known address, not your business location. It starts with monitoring the dormancy period, or timeframe before an asset is deemed abandoned: typically, three to five years, depending on the property type and jurisdiction. That means businesses must have processes to determine how long funds have gone untouched—no simple task when using traditional payments, like checks, rather than digital-led solutions. 

Once the dormancy period is up, businesses must conduct due diligence, a documented process of attempting to reach the property owner. If the business cannot get ahold of the owner, a detailed escheatment report must be prepared and submitted by the state’s annual deadline. Failing to report unclaimed property accurately and on time can lead to audits, legal fees and steep fines. Beyond incurring financial penalties, common mistakes such as neglecting to perform due diligence can lead to customer frustration and even reputational damage to the business.  

Why checks increase compliance risk  

Escheatment is complex in the best of circumstances, but traditional payment methods can increase the burden. Checks are frequently lost or uncashed, creating a high volume of unclaimed property to report. Funds may even go unused because recipients find the payment experience inconvenient. In Onbe’s 2025 Payouts Landscape Report, 42% of consumers said they would consider abandoning $10 or less if the process to access the funds was time-consuming or confusing. Regardless of the amount, businesses are responsible for due diligence and escheatment reporting—meaning a little check could become a big liability if a customer doesn’t feel it’s worth the trouble to deposit. 

Handling escheatment in-house can put businesses at risk, since manual processes for tracking and reporting payments are inefficient and error-prone. For instance, if businesses are not proactive about tracking dormancy periods, they could find themselves in violation of state laws.  

How digital payouts reduce the escheatment burden 

Going digital can dramatically reduce an organization’s risk in several ways. For one, digital payments are less susceptible to delivery issues, since they are sent to the recipient’s email address rather than their last physical address on file. A modern payment experience offers consumers greater convenience and the flexibility to use their funds however they choose—from online bill pay to spending via a mobile wallet at their favorite store. Rather than going to the bank and cashing a check, with digital options, recipients can instantly access their funds, making it fast and easy to claim  

Switching to a modern payout solution also makes tracking payments and dormancy periods simpler with digital tools. Your payment provider may even handle escheatment on your behalf. Onbe assumes 100% of the responsibility for unclaimed accounts, and our solution features StateSmart℠, a proprietary service designed to reduce the risk and administrative burden of escheatment. Offloading unclaimed property management enables your accounts payable team to focus on their core activities rather than spending time tracking down account holders and filing reports. With modern, digital-first solutions, you’ll be able to streamline your operations, remain compliant and offer your recipients a payment experience that feels rewarding—not like one more item on their to-do list. 

Ready to learn more about reducing your escheatment burden? Contact our payments experts.