New Data From 2010 Payments Study
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Every three years the Federal Reserve releases a study that shows macro trends in the payment choices of consumers and commercial account holders. Many in the industry consider the report to be required reading as it offers important insights and trends regarding different payment types including check, ACH, debit card, credit card and prepaid card.
In terms of overarching trends, there is simply no denying the move towards electronic payments. The graph below shows the trends since the study was first produced in 2000. The volume of electronic payments is clearly starting to distance itself from paper checks.
However, a different picture emerges when we look at the value of the payments. The charts below show the contrast between the # of items and the total value of those items processed by payment type. While item volume is in decline, paper checks still account for almost ½ of the value of all payments processed. Likewise, while cards were used in 60% of the transactions, they only account for 5% of the value. In terms of value, check (44%) and ACH (51%) are still the big kids on the block.
Lots of attention is focused on the declining number of checks but it is premature to calling for their demise. There are still 27.5 billion of them written each year! This data is explored in a recent Tower Group whitepaper on the subject that in my opinion is worth reading.
The Fed will be releasing more detailed reports as more survey data is analyzed. These reports are expected to be released in Q1 2011. Full report: 2010 Federal Reserve Payments Study.