SAN ANTONIO, Texas and MOUNDS VIEW, Minn. - Who would have thought 20 years ago that checks would still be one of consumers' preferred methods of payment systems in the 21st century? After all, the demise of the check has been on experts' list of predictions for decades. Yet here we are in the dawn of a new century and not only are checks still around, but they've grown in use by 2% in the last two years. So if the "demise of checks" has turned out to be a nonevent, what's the correct operative phrase or word? "Choice," answered Brad Wheeless, vice president and general manager of Clarke American, credit union division. "It's what consumers want. While the share draft account is still at the center of consumers' payment vehicles, we're also seeing the aging of the youth population who are comfortable with technology and electronic bill paying systems. The growing segmentation among consumers is driving check usage." Even given the increased availability of high tech payment systems, there is still a strong consumer connection to checks. "Outside of cash, checks are the most conventional method of payment," said Liberty President Bob Anderson. "Consumers and retailers like checks because of their convenience, accuracy and the capacity to generate enormous volume of them easily. So all participants have found checks to be a strong and stable payment system." In fact, because of the pervasive use of checks, their cost has remained very competitive with other payment systems and processing costs have come down. According to a report from A.C. Nielsen, check volume is expected to increase to 150 billion in 2001, from less than 100 billion two years ago. "Checks have held their own even as other payment systems have grown," Anderson said. Given this scenario and with all indicators showing the continued popularity of checks, Anderson's best prediction for this century is constant, incremental enhancements in electronic presentment and payment systems, changes he stresses that will be evolutionary, not revolutionary. But this evolution of payment system products will unravel parallel to the continuing usage of checks. That's why, said Anderson, as credit unions go forward, it's imperative for them to have new technology for their members to use, as well as stay in touch with checks. "A consumer's primary financial institution has always been defined as being that financial where they have their checking account," Anderson offered. "Maybe, given the various options and payment delivery systems available to consumers, that definition will change. Clarke American's Wheeless opined that credit union members' demand for service will continue to focus around their share draft accounts, including the availability of seven by 24 service, same day turnaround of check orders and Internet- based, consumer check ordering programs. "It's inconceivable that all consumers will simply abandon the use of checks," Wheeless said. "The issue", says Anderson, "is whether in the continuing evolution of payment systems available to consumers we ignore the importance of the checking account in favor of the latest technology. Balance is everything. It's crucial that credit unions continue to market all forms of payment systems to their members." -
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