The Federal Reserve Payments Study 2016
PrintCheck Payments
While checks start out as paper, since the Check 21 law went into effect in late 2004, check clearing has been adapting and changing.16 Checks are now effectively all processed electronically once they enter the banking system and are increasingly being scanned and deposited electronically by businesses, often using accounting applications, and individual payees using mobile devices.
Some checks are taken out of the check clearing process and converted to ACH payments, but the practice has not grown since electronic check processing took hold. The sum of interbank, on-us, and checks converted to ACH payments is equal to total checks written (figure 5). Total checks written fell to 19.4 billion with a value of $27.34 trillion in 2015, down 3.1 billion or $0.49 trillion since 2012. Checks written fell at an annual rate of 4.8 percent by number or 0.6 percent by value from 2012 to 2015. The average value of checks written grew from $1,239 in 2012 to $1,410 in 2015.
Check payments are composed of interbank and on-us checks and exclude checks converted to ACH payments.17 As mentioned above, the annual decline in the number of check payments, which averaged 6.2 percent from 2000 to 2012, tapered off to 4.4 percent from 2012 to 2015. The number of interbank checks fell to 12.7 billion, down 1.4 billion, while growing in value to $18.02 trillion, up $0.58 trillion from 2012 to 2015. Interbank checks fell at an annual rate of 3.4 percent by number, while growing at an annual rate of 1.1 percent by value from 2012 to 2015. On-us checks fell to 4.5 billion with a value of $8.81 trillion in 2015, down 1.1 billion by number or $0.96 trillion by value from 2012 to 2015. On-us checks fell at an annual rate of 6.9 percent by number or 3.4 percent by value from 2012 to 2015.
References
16. The Check Clearing for the 21st Century Act (Check 21) was signed into law on October 28, 2003, and became effective on October 28, 2004. Check 21 is a federal law that is designed to enable banks to handle more checks electronically as digital images, which has made check processing faster and more efficient. Return to text
17. Once converted, the check is considered a "source document" for the ACH payment. Return to text
