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Studies Confirm Electronic Payments Have Surpassed Checks

Friday, April 1, 2005

For the first time in history, Americans are favoring electronic payments in greater dollar amounts than checking transactions-a trend the Federal Reserve expects to continue. The Fed recently commissioned several studies and discovered that electronic payment transactions totaled $44.5 billion in 2003, while the number of checks paid only totaled $36.7 billion. This represents an annual rate of decline of 4.3 percent for checking transactions since 2000.

The 2004 Federal Reserve Payments Study contained two research components, the Depository Institutions Payments Survey, which included responses from more than 1,500 depository financial institutions, and the Electronic Payment Instruments Study, which included responses from 68 organizations involved in originating, switching or processing electronic payments.

The Electronic Payment Instruments Study revealed that the fastest growing method of electronic payment is debit card transactions, with an estimated annual growth rate of 23.5 percent.

"There is no question that check usage will continue declining," says Dave Sapenaro, senior vice president of the Federal Reserve's Treasury Relations and Support Office. "And with the recent trend toward traditionally cash-based retail establishments such as fast food stores offering electronic payment options, cash usage may decline over time, too." For more information about the studies, visit