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WASHINGTON – Did check usage peak in the mid-1990s? Newly released numbers from the Federal Reserve System correcting earlier released data suggest this may be the case and if so, that check writing in the U.S. may be steadily giving way to electronic forms of payment. In a revised Retail Payments Research Project Report published by the Fed, the agency lowered its estimate of the number and value of checks that were written in 2000 to 42.5 billion checks valued at $39.3 trillion, down from previous estimates of 49.5 billion checks valued at $47.7 trillion that were released in an earlier version of the report. An analysis published in the August edition of the Federal Reserve Bulletin compared the revised annual check volume in 2000 -42.5 billion – to estimates from two earlier Fed studies that showed that 49.5 billion checks were paid in 1996 and 32.8 billion in 1979. Check use as a percentage of retail non-cash payments, including credit card, debit card, automated clearinghouse payments and other electronic payments dropped from 85.7% in 1979, to 77.1% in 1995, and 59.5% in 2000, according to the Federal Reserve Bulletin. According to the Financial Services Policy Committee of the Federal Reserve Bank of Boston, the Fed is now saying that “further analysis and data verification since the release of the report led to the correction of several data errors. This resulted in a revised estimate of 42.5 billion checks in 2000 valued at $39.3 trillion.” The Fed’s 2001 Retail Payments Research Project included the: * Depository Financial Institution Check Study * Check Sample Study * Electronic Payment Instruments Study. The DFI Check Study considered its finding that “42.5 billion checks were written annually in the U.S. accounting for $39.3 trillion in payments” to be one of the significant results of the study. In addition to estimating national check payments volume and value, the DFI Check Study also gathered information on the methods used to clear and settle checks; and collect volume and value estimates for returned checks. Given the adjusted and lower estimate, the Fed concludes that “despite an annual volume of 42.5 billion checks, it appears that Americans are changing their historical, conservative use of payments. The fact that 30 billion electronic payments were initiated in 2000 indicates clear acceptance by consumers and businesses. And given that debit and credit card payments and ACH transactions collectively have grown exponentially in the last 20 years.these electronic forms of payment will become more prevalent and increasingly a requirement of doing business for U.S. companies and financial institutions.” -

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