Electronic payments crowd out checks in US: Fed

December 8, 2010
A man uses a laptop computer at a wireless cafe. Electronic payments have surged in the United States to more than 75 percent of all noncash payments as check usage continues to fall by the wayside, a Federal Reserve report showed Wednesday.

Electronic payments have surged in the United States to more than 75 percent of all noncash payments as check usage continues to fall by the wayside, a Federal Reserve report showed Wednesday.

All types of US grew in the 2006-2009 period studied, with the exception of credit cards, the Fed said.

Wire transfers were not included in the triannual study, whose latest edition spans the worst US since the and a global after the Lehman Brothers in 2008.

Noncash payments increased 4.6 percent per year in the period, to 108.9 billion dollars in 2009.

Electronic payments "now collectively exceed three-quarters of all noncash payments while payments by check are now less than one-quarter," the central bank reported.

Revealing the swift rise of electronic trade in the world's largest , the study found the number of electronic payments leaped 9.3 percent in 2009 from 2006, to 84.5 billion. The value of e-payments totaled 40.7 trillion dollars.

In the Fed's prior study on the 2003-2006 period, roughly two-thirds of the payments were made electronically in 2006.

Check payments were the biggest decliner in the latest study, dropping 7.2 percent to 24.4 billion and totaling 31.6 trillion dollars.

Credit card usage also faded, falling 0.2 percent, and were eclipsed by debit cards as the most used noncash instrument, the Fed said.

Debit cards jumped 14.8 percent to 37.9 billion payments totaling 1.5 trillion dollars.

"The results of the study clearly underscore this nation’s efforts to move toward a more efficient electronic clearing system for all types of retail payments," said Richard Oliver, vice president of the Federal Reserve Bank of Atlanta, which sponsored the study.

"It is also likely that the results reflect changing consumer behavior during difficult economic times," he added.

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Sean_W
1 / 5 (1) Dec 08, 2010
Does "credit card" include prepaid cards? (Not literally credit cards but same companies/same usability.) I have only recently started using them - mostly for online purchases since they fix problems inherent in debit and regular credit cards: They leave less purchase information for marketers, they are accepted by sites that only accept credit - not debit, you don't have to prove to anyone that you are credit worthy and you can get a small amount put on so if someone defrauds you they only get what was on the card. Tell a bank that you want a low limit credit card for that last reason and they will act like you've asked for a unicorn and tell you not to worry because if something happens they will pay most of the bill so that you don't have to like wanting to prevent a thief from getting away with a crime is some alien concept.

Prepaid cards are not perfect (try contacting them to let them know you are traveling and not to freeze the card for "fraud". But they fill a niche.

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