The 'check is in the mail' less often nowadays

New statistics just out from the Federal Reserve Board give weight to what many of us know from our day-to-day lives. We're writing fewer checks these days to pay the bills.

It's not that we're not paying our bills, but that we're paying them less often with checks and more often with credit cards, debit cards, ATM cards and other automated electronic transfer methods.

Checked out?
Check processing was the only noncash payment method to see a decrease in use between 2003 and 2006, according to the 2007 Federal Reserve Payments Study. Check transactions decreased 6.4 percent; while electronic payments increased 12.4 percent overall. The two categories were used about equally in 2003.

Electronic payments grew in every category during the three-year period:

• Automated clearinghouse (ACH) payments: up 18.6 percent
• Debit cards: up 17.5 percent
• Credit cards: up 4.6 percent
• Electronic benefits transfers: up 10 percent

More and more people are paying everything from utility bills and mortgages to take-out food and their bail bonds with their credit cards and debit cards. 

Researchers note that electronic check processing has increased in recent years. Those who bank online may notice that some of the paper checks they write to pay their credit card or other bills appear on their transaction statements as electronic transfers. 

Electronic advantages
Those of us using electronic payments are already well aware of the benefits:

• You don't have to pay for and order as many paper checks.
• Paper checks can be a security nightmare when they are lost or stolen. Electronic checks avoid that hassle.
• Speed. You are not at the mercy of the U.S. Postal Service for delivery of your payment. But you must be sure to allow processing time for the electronic transfer. Even though you transfer the funds on a Monday morning, the transfer may not be posted to the recipient's account until the next day (check with your biller or payments processor).

Don't write off check writing just yet. Even with the decline in use during the study period, there were still 30.6 billion checks written. The checks will be in the mail for many years to come.

See related: "Cashless businesses slowly catch on"