September 19, 2013, Mt. Prospect, IL— Still in favor by many consumers, checks remain both a common and highly used method of payment in the United States. Results from a 2010 Federal Reserve Payments Study reveals 24.4 billion checks are written in the United States annually – with 27.8 billion checks written in 2009 valuing $32.4 trillion and an average of $1,165 per check.¹, These are surprising numbers given America’s reliance on credit cards and growth of electronic payments in recent years. Yet credit card use appears to be ceding ground it had previously gained due to the recession and shaky recovery as well as lenders’ lowering credit limits, which made it less than ideal for many Americans to continue using their credit cards as they once did.
Cummins Allison, the leading innovator and provider of check, currency and coin handling solutions, shares why shoppers may be increasing their check usage and how retailers can be prepared.
Growth of Check Payments
According to the Federal Reserve Bank of Cleveland, checks still represent10 percentof all U.S. payments². Broad acceptance, enhanced security to protect sensitive information, and ease of use are just a few reasons why retailers may be experiencing an increase in check payments. As such, retailers across the country must be prepared to handle consumer purchases that can't be made with a credit card.
Broad acceptance. Although credit cards are widely used, 55 percent of U.S. small businesses still do not accept them³, while most retail stores do accept paper checks. Therefore, unless the shopper is carrying enough cash on hand, a paper check may be the only way to make that purchase. Paper checks are also useful for those who wish to avoid spending with plastic.
Enhanced security to thwart fraud. Should a shopper’s wallet or purse become lost or stolen, thieves can often carry out small credit or debit card purchases without a signature. Yet, banks and merchants require a signature on a check. Thus, fraud is much more difficult with a check versus other payment methods.
Ease of use. One in five U.S. households, or20 percent, do not have Internet access4. Unable to have access to funds electronically, many folks find it easier to just write a check. Retailers must still be able to cater to patrons that don’t have Internet access or may not be tech-savvy.
Handling Checks with the Proper Processing Technology
The ability to serve consumers who may have experienced a drop in credit limits or prefer to make a payment with a check means retailers need to invest in a cash and check processing technology to manage those transactions as efficiently as possible.
Consumers and businesses still using paper checks benefit from the security and flexibility provided by this traditional payment method. In addition, these businesses can take advantage of today’s check processing technology that can process deposits quickly and accurately, providing even greater speed and service for consumers and businesses using checks and for the retailers, businesses and financial institutions they work with.
By investing in an updatedcheck scanning machine that can also process cash, retailers are able to spend less time processing transactions and spend more time on the floor with shoppers, enhancing their experience and encouraging them to purchase more products.
For more information on the benefits of check scanning and processing equipment, visit cumminsallison.com/checks
1 Federal Reserve System, http://www.frbservices.org/files/communications/pdf/research/2010_payments_study.pdf
² Federal Reserve Bank of Cleveland,
³ 2012 Intuit GoPayment Survey, http://about.intuit.com/about_intuit/press_room/press_release/articles/2012/GetBusinessGrowing.html
About Cummins Allison
Cummins Allison is a global leader in developing solutions that quickly and efficiently count, sort and authenticate currency, checks and coin. With a heritage of leadership in technology and product innovation spanning more than 125 years, Cummins Allison serves the majority of financial institutions worldwide, as well as leading organizations in retail, gaming, law enforcement and government. Ninety-seven percent of our customers recommend our products and services. CA holds more than 350 U.S. patents and invests double the industry average in R&D. Our world-class sales and service network includes hundreds of local representatives in more than 50 offices in North America, 4 wholly-owned subsidiaries in Europe and is represented in more than 70 countries around the world. For more information, visit cumminsallison.com.
Carol Moore – Vice President Marketing
Cummins Allison Corp.
Outlook Marketing Services, Inc.