Electronic Payments Overtaking Checks

A new study by the Federal Reserve has revealed that Americans are using electronic payment methods like credit cards far more often than checks.

In the three-year period from 2006 - 2009, noncash payments in the US increased 4.6 percent per year. Among the noncash payments, 20 billion more e-payments were made in 2009 as opposed to 2006, a 9.3 percent annual increase.

The most dominant form of e-payment is debit card, which represents approximately 35 percent of total noncash transactions. The annual use of debit cards increased by over 12.8 billion payments, the largest increase by any type during the survey period, reaching 37.9 billion in 2009, a 14.8 percent annual growth rate. In comparison, the number of checks used fell by six billion, or 7.2 percent, over the same period, while the number written fell by about 5.7 billion, an average of 6.1 percent per year.

Not only does this study show the continued move from checks to electronic means of making payments, but we also see the extraordinary progress the industry has made in electronifying the clearing process for the 27.5 billion checks still being written," said Richard Oliver, EVP, Federal Reserve Bank of Atlanta.

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