Will Paper Checks Disappear in the US?
- * Checks are still significant: Despite the rise of electronic payment methods, paper checks still represent 5% of all transactions and 21% of the total value of payments.
- In essence, the text argues that while less common, paper checks remain a vital payment method, especially for certain segments of the population, and phasing them out could...
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* Checks are still significant: Despite the rise of electronic payment methods, paper checks still represent 5% of all transactions and 21% of the total value of payments.
* Federal Reserve disagreement: Michelle Bowman, the Federal Reserve’s vice chair for supervision, disagrees with a recent Fed statement and believes suspending check services would be inefficient, especially given their continued importance.
* Historical context: Checks have a long history, dating back almost 2,400 years, with modern checks gaining popularity around 500 years ago in Amsterdam. They originated as written orders to cashiers to pay debts from deposited funds.
* Impact on vulnerable populations: Eliminating checks could negatively impact:
* Unbanked individuals: Approximately 6% of adults (22% of those earning under $25,000 annually) rely on checks to receive income.
* Older consumers: Those less cozy with technology.
* Those without smartphones: About 10% of Americans don’t own smartphones and may struggle with fully electronic systems.
In essence, the text argues that while less common, paper checks remain a vital payment method, especially for certain segments of the population, and phasing them out could create hardship.