On Wednesday, Oct. 28, at the FIS User Group in Oklahoma City, Digital Check presented a follow-up to our successful white paper The Disappearing Check: How Much Longer Until the End? The new report, titled The Disappearing Check Part 2: Assessing the Decline, examined new data in an attempt to prove or disprove the first paper’s theory that the use of paper checks may be due to flatten out gradually after two decades of steady decline. In our original report back in March 2015, we proposed the theory that – despite continued advances in online and mobile payments technology – the decline in paper checks should begin to slow slightly, as most of the “easy” checks have already been shifted to electronic payments, leaving the more difficult use cases still to be replaced.
After NACHA released its 2014 statistics on ACH usage, we looked at those figures, as well as current and historical data across all forms of payments, to see whether we could confirm our hypothesis. We believe signs indicate that the decline in checks will slow slightly when the Federal Reserve Bank releases its next official statistics – to a decrease of about 1.5-1.8 billion checks per year, compared with 2 billion annually over the past decade.
The second section of our new white paper explores the timing and likely mechanism for the end of checks in the U.S., examining data from other countries to arrive at a likely outcome. We conclude that the demise of the check will take place via an organized phaseout by the banking industry and regulators, and propose a level of check usage at which this would be likely to occur.
For more details, read the full report here.