The list of technological species endangered by new innovations is growing long: First 8-track tapes and VHS, then printed newspapers and the compact-disc album. Now we can add the checkbook to the list.
Or that’s the word from the Federal Reserve. In an interview with “American Banker,” Richard Oliver, an executive vice president at the Fed’s Atlanta branch, said,
“The pace of decline in paper checks, what we call legacy checks, is going to continue if not accelerate… We have to continue to accelerate the downsizing of our paper processing infrastructure.”
The Fed’s Financial Services Policy Committee issued a study this week showing that 58 percent of checks written last year came from consumers, either as payments for things like utilities or in retail check-out lines.
And it’s those consumers who are increasingly using credit or debit transactions or electronic checks, which are processed by automated clearing houses, not old-fashioned check-processing facilities. Oliver is saying those facilities are less and less necessary - at a rate that is a little settling for the industry. The Fed oversaw 45 full-service check processing sites in 2003, and that number will fall to four in two years, the magazine said. As he noted,
“The whole industry is facing that dilemma. The volumes are running off faster than you can strip out the assets. You’re going to have the issue of wrestling with profitability because of all these stranded assets.”
