Checks, Charges, and Changes
Financial News Trends at AVPS Blog
We always like it, here at the AVPS blog, when pieces of “separate” financial news combine to make a single, bigger story, or to provide a trendline.
The Decline of Paper Checks
This summer, that trend continued when two separate stories, both focusing on checks, captured our attention.
Anticipation of Federal Reserve’s Report
The first article, anticipating a forthcoming report from the Federal Reserve on consumer payment habits, highlighted a significant point. Although the 2013 report remains unpublished, the analysis from 2010 revealed a steep drop in paper check usage, plummeting from 61 percent to 26 percent of all users. In this era of contactless payments and mobile transactions, one wonders just how much further this number has declined.
The Continuing Use of Checking Accounts
However, it’s important to note that the first article specifically emphasized paper checks, indicating that customers continue to utilize their checking accounts through various means, including debit cards and E-checks.
Predictions of Card Payment Dominance
Conversely, a recent “The Journal” article from the UK predicted that card payments are set to surpass cash within the next decade. This aligns with our existing coverage on the rise of debit and credit cards, along with the expansion of mobile commerce. Yet, the same article points out the surprising longevity of traditional payment methods like checks, whose decline seems to have been slower than expected. For more detailed information, you can refer to an article from Mirror Online, which discusses the shift from cash to card payments and notes significant increases in contactless card usage, with 5.6 billion such payments recorded last year
The Evolution of Payment Forms
Or perhaps the idea of “check” (reverting to the American spelling now) will simply change, much in the way that the idea of “cash” (or even “card”) is.
The Rise of E-Commerce and Contactless Cards
The article also points out that the surge in card usage is expected to be propelled mainly by the growing prevalence of e-commerce and the use of contactless cards at retail points. Furthermore, the article anticipates an increase in one-off account payments, fueled by mobile and internet banking. Additionally, it mentions that a significant number of users access their bank accounts through ‘remote channels,’ with about a third doing so via mobile devices.
Adapting to Changing Payment Methods
So checks are changing, and so is cash. As we head into fall, be sure you’re ready for those changes.
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But you can always contact your AVPS rep as well, to make sure you’re ready, and that the payment methods you accept aren’t lagging… one or two Fed reports behind the rest of your competitors!
