Electronic payments eventually force out checks

The study held by TowerGroup shows that check payments are getting less popular with customers in the US and forecasts that check volumes will decline to 17.9 billion transactions by 2009 which is ascribed to common tendency among consumers, businesses and government entities to make and accept electronic payments.

Electronic payments became widespread in light of businesses and consumers' need for more efficient methods to make purchases and pay bills. Yet business-to-business (B2B) payments make up 60% of US check dollar value so far. In 2003 check payments accounted for 46% of total US payment volume while 3 years later it declined to 31%.

According to statistics online bill payments have registered an increase at a compound annual growth rate of 29.6 percent from 2005 to 2007 and the study predicts it to increase at a compound rate of 18.7 percent by 2012.

However, the average check value is expected to grow over time at the expense of Automated Clearing House (ACH) for smaller-dollar items, use of cheques for bigger purchases and payment migration to debit. Moreover, many analysts still find checks to be important in the US payments market and they are claimed to remain until the time when payees are able to receive electronic payments and banks consider that checks are too expensive to process.