The Bankwatch

Tracking the consumer evolution of financial services

Will paper check usage ultimately be replaced by debit cards (US)

eCom Gal over at “Where are V“, asks a fair question because the US is lagging the rest of the world in debit card adoption/ elimination of cheques.  Great question, and the answer isn’t simple.

but seriously, will paper check usage ultimately be replaced by debit cards and online bill pay?

Source: who are “V”?: Who gets to say when paper checks go away?We Are V- Verity Credit Union’s Blog

The short answer is, no…  although debit card will grow rapidly, as retail consumers shift quickly to debit.  Why – business cheque use persists.

These are old stats from Canada, and followed by more recent ones.  Whats interesting to me, is that cheques dropped but not by much.  The generally accepted explanation is that business cheque writing has no diminished as much as expected in Canada at least.  This would be the next big shift -B2B payments, to eliminate those cheques.


Finally some stats from a Celent 2003 report showing propensity for GenY to use electronic transactions.


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Written by Colin Henderson

February 21, 2007 at 19:51

Posted in Debit cards, Payments

6 Responses

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  1. Out of the approximately 300 million people in the US, the census bureau estimates that about 110 million are over the age of 45. That means 110 million people who have been writing checks for the past 25 to 75 years. So online bill payment and debit cards appear on the scene in the past 10 years, and what? All these people are going to stop what they’ve been doing for the past 25 to 75 years? Habits die hard. Especially when there is no incentive to change or pain in continuing.


    February 23, 2007 at 09:02

  2. For retail users, no matter their preference for electronic payments, there’s still a major factor in why they’re forced to use cheques: rent. I’d gladly wash my hands of cheques altogether, but as long as my bank still charges $1.50 for email money transfers (while cheques are free) I’m inclined to hand over a rent cheque each month.

    Paypal needs to launch a landlord campaign. 🙂

    Dan Dickinson

    February 23, 2007 at 10:40

  3. Love the landlord idea!

    Ron – re age – thats not an issue in other countries. Is there a particular convervatism about US thats different?

    In Canada the members of interac (the debit card network) got together with joint promotion in the 90’s with a common logo etc. That seemed to make a large part of the difference. Its hard to imagine such a campaign being orchestrated in the US where there are multiple debit networks.


    February 23, 2007 at 11:59

  4. When I saw the title of the post, I assumed you were posing the question of checks being replaced by debit cards in the US.

    I don’t think this is about “conservatism” — I think its about habit. People in the US over the age of 40 have been writing checks for a long time. I thought banks had learned the field of dreams lesson years ago (that just cuz you build it, it don’t mean they will come).

    Re: your Canada reference: That’s why online banking took off so much quicker than in the US — coordinated effort. I don’t see that happening in the US.


    February 23, 2007 at 12:39

  5. Ron … I am just suggesting that habit can be broken, since Canada was similar in terms of that habit. But I agree that getting the co-ordination to address in the US is really hard.


    February 23, 2007 at 12:56

  6. sorry, wasn’t picking up on that.

    yep — habit CAN be broken — with education and incentives. Not seeing too many banks this side of the border doing much of either.


    February 23, 2007 at 13:36

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