New Fed Data Underscores How Far Electronic Payments Have Eaten Into Checks

It’s no secret that electronic payment methods have systematically eaten away at check volume in the United States, but now new data from the Federal Reserve shows just how far that trend has gone. 

A total of 16 billion checks were written in 2018 for a total value of $26.2 trillion, according to the Fed’s latest Payments Study, released in December. That’s down from 20.2 billion and $29.68 trillion in 2015, the last year of the Fed’s previous triennial study.

The new results may not be all that surprising, given the inroads methods like credit and debit cards have made in recent years, but the decline in checks since the turn of the century is even more dramatic. While checks controlled 58.8% of all core non-cash payments in 2000, that share stood at just 8.3% in 2018, according to the Fed data. Measured by value, checks dropped from a two-thirds share to 26.6% over the 18-year period.

The Fed defines core non-cash payments as the total of credit and debit card, automated clearing house, and check transactions. The total of checks written includes both payments presented as checks and checks that are converted to ACH payments. The decline in checks’ share of value came despite an increase in average check value between 2015 and 2018, from $1,468 to $1,635.

Checks presented as payments totaled 14.5 billion in 2018, down from 18.1 billion in 2015, for a 7.2% average annual drop. That shows an acceleration of the annual rate of decline between 2012 and 2015, which was 2.8%, but represents a return to the rate seen between 2003 and 2012, the Fed says.

Meanwhile, the total number of credit and debit card payments increased at an average annual rate of 8.9% from 2015 to 2018, even faster than the 6.8% rate seen in the prior three years.

In another sign of the advance of electronic payment methods, the number of ATM cash withdrawals is also declining, though not as dramatically as the drop in checks. Withdrawals totaled 5.1 billion in 2018, down by 100 million from 2015, according to the Fed study.