The Rise of e-Payments and the Paper Check Decline

Checks cause a number of problems and we’ve experienced all of them at one point in time.  Slow-pays, made out to the wrong entity, not signed, checks that are never sent, or even fingers pointed at the USPS.   Checks are just excuses to never mail it… the reasons goes on and on.  And we’ve lived with those problems for years, all the while making company policies and rules on how to handle these problem payments.  And to create and implement such internal rules and regulations sucks a ton of human and financial resources to do so.  But checks weren’t all bad.  For many years there were only two ways to send a large sum of money – bodyguards with kevlar carrying your funds in a briefcase or a written check sent with the pony express.

But today is a different story.

The internet is the disruptor to paper checks. Based on research from The 2013 Federal Reserve Payments Study on payment trends among Americans, it found that the number of paper checks Americans have written since 2000 has declined by more than 50 percent, while electronic and card payments have tripled over the same time frame. That trajectory won’t slow down anytime soon.

So what’s the future? eChecks and credit card payments will dominate the immediate future for payments. Most millennials have never experienced the woes of the paper check and I don’t blame them; I wouldn’t buy them either.  Sell a millennial anything and they’ll ask to use their debit or credit card. How many reward credit cards do you own? I have two in my pocket and I love it when I can rack up points for any purchase.

Checks are on life support and will likely give up the ghost someday soon. If the millennials have anything to say about it, they would’ve pull the plug yesterday and I would applaud that!

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