The Reappearing Check: Maintaining the Magic in 2018

An interesting new white paper from Digital Check explores the expected demise of paper checks – – and how, as if by magic, the “expected” suddenly did not occur.

We all know the drill: 50 billion checks written in the 90s; 20 billion checks written in 2013 – – – do the math, and at that rate, checks are gone in 2021.

But a funny thing happened on the way to the check apocalypse:

Then in 2016, the new numbers from the Fed came in, and the results were stunning even to us. Past trends had pointed toward an expected 12-13 billion paper checks remaining in the U.S.; we had predicted a modest leveling-off to around 14-15 billion instead. The official total was 17.3 billion – our “bold” prediction actually hadn’t been bold enough. The decline of checks hadn’t just slowed down; it had nearly stopped.

Another data point came from ECCHO last year at the OrboGraph Conference, where David Walker proclaimed the overall number at 18B+.

Given the benefit of hindsight, Digital Check observes four separate “digital payment” events evenly spread out (by coincidence) over 30 years:

  1. Direct deposit arrives in the 1980s and replaces payroll checks with ACH payments
  2. Point-of-sale card terminals gain widespread adoption in the 1990s and replace the check with credit and debit cards in retail settings
  3. Online bill pay arrives in the early 2000s and replaces many C2B payments with card or ACH transactions
  4. Prepaid debit cards gain widespread adoption in the late 2000s and replace many B2C or G2C payments

So — “slow, steady decline” was actually a measurement impacted by an almost mathematically uniform progression of market-tech events!

Also noted is the fact that “rapid growth” payment technology of late – Apple Pay, Bitcoin, Chip-and-PIN cards, Smartwatches, Mobile wallets, etc. – are innovations that build upon other technologies. In other words, they are not necessarily new portals, but innovations and/or improvisations on current adopted tech that do not necessarily create new users.

The paper notes, on a more elemental level, that businesses are slow to move to digital payments because of set-up difficulties, fees, and security issues. For the paper check world, this means that an emphasis on security and ease-of-use — the hallmarks of all OrboAnywhere technology solutions — is the correct course to be on as we enter 2018.

Our New Year’s resolution is to share with you many new capabilities in the upcoming year…be on the lookout!






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