Check Trends

By Don Shellenberger

June 11, 2002

It’s amazing that checks still account for approximately 10% of all payment volume, down only 1% in 20 years, according to a recent independent study. Checks still represent nearly two-thirds of all banking volume, taking into consideration that business-to-business check usage hasn’t decreased significantly, even with the availability of electronic funds transfer.

Consumers write up to 35% of their total checks at the point of sale, and 52% from home for recurring bills.  Eighty eight percent of U.S. adults have checking accounts, and we appear to be the only industrial country in which the per capita number of checks is still increasing.  All this is in spite of the rapid growth in other forms of payment, such as credit and debit cards.

Checks are here to stay!

According to a survey conducted by Chain Store Age, consumers used the following payment methods during a recent 12-month period:

Cash                94%

Checks             71%

Credit Cards    57%

Debit Cards      38%

Store Cards      29%

Smart Cards     12%

Those consumers surveyed who prefer checks find the payment method easy, convenient, appreciate the ease of record keeping, and just don’t like to carry cash.

As we step into the early years of the new century, it’s apparent that paper checks will be around much longer than originally expected.  Consumers find it hard to function without them. Retailers welcome checks at POS since it’s widely known they are second only to cash as the least expensive form of tender they can accept-this is even before any recovery of bounced checks is realized.

As long as there are checks, there is a need to have an efficient and cost effective way to deal with the inevitable bounced check.