Latest Fed study underscores strength of electronic payments

On Dec. 8, 2010, the Federal Reserve released its latest take on U.S. consumer payment habits, indicating that electronic payments accounted for more than three-quarters of all noncash payments in 2009.

In total, the Fed reports, Americans made 84.5 billion electronic payments last year and wrote about 24.4 billion checks. The Fed's data show that the electronic share of noncash payments grew 9.3 percent between 2006 and 2009, while the number of checks paid by banks fell 7.2 percent. The Fed's data include automated clearing house (ACH) transactions but not large-dollar wire transfers.

The biggest increase was charted by debit cards: 14.8 percent annual growth between 2006 and 2009. Debit card use now tops all other forms of noncash payments, accounting for 35 percent of total noncash payments, according to the Fed's data.

More efficient payments

"The results of the study clearly underscore this nation's efforts to move toward a more efficient electronic clearing system for all types of retail payments," said Richard Oliver, Executive Vice President of the Federal Reserve Bank of Atlanta, and the Fed system's resident payment maven.

While the Fed and the industry deserve credit for the trend, it is "also likely that the results reflect changing consumer behavior during difficult economic times," Oliver suggested.

The Fed collects retail payment data about every three years. The 2010 Payments Study, its latest compilation, includes three separate sets of data, collected from financial institutions; payment networks, processors and card issuers; and electronic clearing houses.

Here's a quick rundown of what the 2010 study reveals about payments in 2009:

• There were 24.4 billion checks valued at $41.6 trillion processed by banks.
• ACH transactions totaled 19.1 billion and were valued at $37.2 trillion.
• 21.6 billion credit card payments worth $1.9 trillion were made by consumers.
• Consumers made 37.9 billion debit card payments valued at $1.5 trillion.
• 6 billion prepaid card payments worth $0.1 trillion were made by consumers.
• Consumers made 6 billion ATM withdrawals valued at $0.6 trillion.

A detailed summary of the 2010 Payments Study is available online at www.frbservices.org .

Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.

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