For the first time, the number of ACH
debit transfers has exceeded the number of check payments, according to
a new Federal Reserve study.
Data released earlier in December showed that there were 16.6 billion ACH debit transfers
in 2018 but only 14.5 billion check payments. Back in 2000, the story
was much different: the year’s 2.1 billion ACH debit transfers paled in
comparison to its 42.6 billion check payments.
However, the number of check payments
has declined rapidly, falling 7.2% per year from 2015 to 2018. That
rate was in line with drops between 2003 and 2012, but it was more than
twice the 2.8% annual drop recorded over the prior three years.
"The growth of payments using debit
and credit cards and the automated clearinghouse (ACH) system continued
to accelerate from 2015 to 2018, while check payments continued their
long-run decline,” the Federal Reserve noted in a press release.
The 2019 study included consumer,
business, nonprofit and government payments in 2018 from U.S. domestic
deposit accounts, prepaid debit cards, and credit cards, as well as cash
withdrawals and deposits at depository institutions.
Noncash growth rate accelerating
The study also found that noncash
payments including debit card, credit card, ACH and check payments rose
6.7% per year between 2015 and 2018. The growth in debit and credit card
payments accelerated too, rising 8.9% per year between 2015 and 2018,
compared to a 6.8% annual growth rate between 2012 and 2015. Debit cards
were used almost twice as much as credit cards in 2018, according to
the data. ACH credit and debit transfers also grew faster, rising by 6% a
year between 2015 and 2018, compared to 4.9% per year between 2012 and
2015.
“These core noncash payment types
have retained their ability to be used in traditional ways even while
they increasingly function as the means of settlement for innovative
types of alternative payment methods and services, such as smartphone
and internet-based services,” the Federal Reserve noted.
Remote payments rivaling in-person
The Federal Reserve’s data also
chronicled the rise of remote payments, which likely reflected continued
changes in consumer shopping and financial management habits.
“For general-purpose
(network-branded) cards overall, the value of remote payments in 2018
nearly equaled in-person payments, driven in part by growing e-commerce
card payments and the use of cards for recurring bill payments.
More than half of in-person general-purpose card payments were chip
authenticated in 2018, compared to 2.0% in 2015,” the Federal Reserve
noted.
Fewer ATM withdrawals but more cash coming out
ATM visits
continued to decrease, according to the data. The Federal Reserve
reported 5.1 billion withdrawals in 2018, which was a 0.1 billion
decrease from 2015.
“The rate of decline for ATM cash withdrawals slowed compared with
the previous three years, falling 0.9% per year from 2015 to 2018. The
decline in the number, combined with an increase in value, resulted in
average ATM cash withdrawals of $156 in 2018, compared to $146 in 2015,”
it said.
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