Credit: cumminsallison.com1

AUGUST 14, 2012, MT. PROSPECT, IL— Although electronic banking has become increasingly popular in recent years, checks remain a common and highly used method of payment in the United States. A 2010 Federal Reserve Payments Study estimates that there are still 24.4 billion checks written in the United States annually. In fact, checks written from person to person increased by 3 percent per year between 2006 and 2009.2
Cummins Allison, the leading innovator and provider of coin, check and currency handling solutions, understands the importance of maintaining traditional payment methods and the role they play in today’s banking industry.
Benefits of Using Checks
While the use of credit cards and electronic payments has grown in popularity, many consumers and businesses are not ready to abandon the use of checks. And in some cases, paper checks offer certain benefits that electronic payments cannot, such as:

1. Security in Transaction
Some consumers remain hesitant to adopt electronic payment methods due to security concerns and uncertainty around who will have access to their personal banking information. For many, especially older generations, a tangible check offers a sense of security in the financial exchange between two parties. Checks also offer a paper trail that can easily be followed, and if a check is lost or an incorrect payment is made, banks can prevent the check from being cashed.

2. Careful Spending Habits
Checks promote careful and conscious spending habits by encouraging consumers to balance their checkbook. According to SuperValue Checks, credit cards can motivate consumers to spend as much as 30 percent more on purchases than if they paid with cash or check. Actively writing a check and balancing a checkbook helps consumers recognize the amount they are spending, whereas charging items on a credit card can lead to impulsive spending.

3. Business and Personal Transactions
Checks remain a widely used and accepted form of payment, particularly in the business world. According to the Federal Reserve, from 2006 to 2009, business-written checks increased from 41.9 percent to 46.9 percent. Checks written by businesses accounted for 82.8 percent of the total check value. Paper checks are also frequently given as gifts since they can be used anywhere and at anytime, compared to cash that can easily get lost and gift cards that limit where they can be used.3

4. Cost-Effective Payment Method
Electronic payment forms may be growing in popularity, but traditional payment methods remain highly cost-effective. Both cash and checks still play a critical role in the national payment system. This is demonstrated by the fact that nearly $1 trillion in U.S. currency circulated last year. Economists Jeremy Gerst and Daniel Wilson articulate unique benefits of cash, such as its appeal as a back-up store of value, which makes it likely for currency to continue to play an important role in the U.S. payment system.4 Cash and checks go hand-in-hand, as checks are a way to carry around large amounts of cash without the risk of actually handling the currency, while purchasers find carrying currency more preferable to writing out checks.

Embracing Paper Check Technology
Despite the recent decline in their use, paper checks remain an integral part of today’s commerce. In fact, the 2010 Federal Reserve Payments Study also revealed that there were 27.8 billion checks written in the United States in 2009 that had a total value of $32.4 trillion and an average of $1,165 per check.5 Consumers and businesses still using paper checks benefit from the security and flexibility provided by this traditional payment method. And at the same, 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 the retailers, business and financial institutions they work with.

  1. Cummins Allison is a global leader in developing technologies which count, sort and authenticate currency. The U.S.-based company has a 125 year heritage of leadership in technology and product innovation and currently serves the majority of financial institutions worldwide, as well as leading organizations in retail, casinos, law enforcement and government. The company holds more than 350 U.S. patents and has ongoing research and development (R&D) investments double the industry average. Cummins Allison is headquartered near Chicago, IL with R&D centers near San Diego, CA and Philadelphia, PA and wholly owned subsidiaries in Canada, the United Kingdom, Ireland, Germany and France. The company also has an extensive sales and service network with more than 50 offices in North America and is represented in over 70 countries.
  2. Money Crashers,
  3. Don’t Quit Your Day Job (,
  4. FRBSF Economic Letter
  5. Federal Reserve System,

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