Old-fashioned checkbook on the decline

For many Americans, checks aren't the staple payment form they used to be. New data collected by the Federal Reserve suggests check writing is steadily giving way to electronic forms of payment, such as credit cards, debit cards, and the Automated Clearing House.

Of the 80 billion retail payments American consumers and businesses make annually, about 60 percent are by check, the study found. The last time the government conducted a comprehensive study, in 1979, checks accounted for 85 percent of noncash payments.

"We believe the results [of the study] clearly paint a picture of a payments system in migration," says Roger W. Ferguson, Jr., vice chairman of the Federal Reserve Board.

Some 1,300 financial institutions - including banks, thrifts, and credit unions - and 89 electronic payment processors took part in the study by responding to surveys.

A complementary study that examined randomly selected checks found that individual consumers write about 50 percent of all checks. More checks (25 percent of check volume) are written for remittance or bill payment than for any other purpose. The next most common use was at the point of sale.