A study released by the Federal Reserve Board's Financial Services Policy Committee on Tuesday, based on a sample of 30,000 checks from the image archive Viewpointe, indicates that businesses write nearly 40% of all checks and receive nearly three-quarters of all checks. Almost half of the checks written by consumers are for payments to businesses, either for bill payment or at the point of sale (POS).
Most consumer bill payment checks are being converted to ACH: 2.6 billion consumer checks were converted and cleared as ACH transactions in 2006. However, 42% of sampled checks are ineligible for ACH conversion under NACHA rules prohibiting conversion of checks with missing/no signature, checks greater than $25,000, and checks written by businesses or the government.
(Graphic courtesy of American Banker)
Today's American Banker story also reports that due to declining check volumes, the Federal Reserve is accelerating its plans to close check processing facilities and anticipates that commercial banks will do the same.
The Fed has announced plans to cut back so that by mid-2011 it will have four full-service item processing centers, in Atlanta, Cleveland, Dallas, and Philadelphia; 17 other centers will remain open but will handle only images. The Fed had 45 full-service processing sites in 2003.
Learn more:
- Federal Reserve Press Release (03/25/2008)
- American Banker article (03/26/2008)
