Chase: Consumers and Businesses Shy Away From Checks

May 05, 2014 — Guest Contributor

Consumer payments systems in the US are in the midst of a two decade long transformation. Cards are in and paper payments (i.e. cash and checks) are moving out as preferred payment methods. Nilson projects that from 2012 to 2017 the use of cash by consumers will drop from 31.23% of all transactions to 22% of all transactions. Check use will fall from 8.55% of all transactions to 4.2% of all transactions. By 2017, card use (includes Credit and Debit) is projected to make up 61.54% of all transactions.[1]

Consumers are using checks less often. 64% of consumers confirm they now write fewer than three checks per month overall, up from 35% three years ago.[2]27% of small businesses report receiving fewer checks than they did one year ago.[3] With the rising use of cards, the number of checks used for payment in small businesses is only expected to fall.

The use of checks appears to be a generational preference. The rise in Millennial purchasing power will contribute to the overall decline in use of checks. 52% of the Millennial generation, 18-34 year olds, indicate that they never use checks as a form of payment. Millennials also represent the largest percentage group that prefers to shop at locations that only accept multiple forms of payments—at 69%.[4] Millennials are predicted to be the driver of trends and innovations in a number of areas—payment methods appear to be one of them.

The Rise of Plastic

Consumers are flocking to credit and debit cards thanks to the flexibility that they offer and the ability to use through nearly every channel.  Debit cards are becoming a form of payment of choice for a key reason—the ability to have purchases deducted directly from a checking account. The TSYS 2013 Customer Payment Choice Study shows that this is the most valued feature in payments with the highest response rate at 55%.[5]Understanding these trends can only help merchants to adjust their payment option to best meet the demands of consumers- while also streamlining their own payment process.

In 2012, consumer spending on cards represented the majority of all transactions – at 87.09 billion and representing 53.57% of the total share of all transactions. Cards are clearly favored above paper forms of payment—and this will continue to grow in 2017 representing 66.82% of all transactions. Debit cards in particular are the card of choice representing the payment method for 31.65% of all transactions in 2012 and growing to 39.72% by 2017. Debit payments are set to represent more payments than credit, EBT and prepaid cards combined. [6]

Among All Cards, Consumers Prefer Debit

From 2008 to 2012, $141 billion in net spending shifted from credit cards to debit cards, and most of that occurred from 2008 to 2009.[7] A large part of the shift from credit to debit at that time can be attributed to the US financial crisis. Shaken by an economic collapse, consumers were weary to take on more debt and overleverage their finances.

The reliance on debit cards continues as the economy climbs out of the recession. Active debit card users performed an average of 19.4 purchases a month with their debit cards in 2012 compared with 18.3 a month in 2011.[8] For merchants, this is a clear indication of consumer preferences and that debit payment acceptance is a must.

The Chase Advantage

A simplified payment process that fits the needs of shoppers makes the customer happy and keeps them coming back. Chase understands the needs of today’s consumers and works with merchants to facilitate payment acceptance. Not only does Chase help to support the use of the preferred payment of choice, but features provided to merchants by Chase are second to none. To help merchants appeal to a growing percentage of consumers demanding to use their debit cards, Chase offers competitive debit rates, no monthly minimum and no annual fee. It’s a hassle-free way to accept debit card payments, make life easier for merchants and keep customers coming back—that is the Chase advantage.

For a Free Cost Comparison, please contact Stephanie Fung at 1 972-324-5628 or 

[1]The Nilson Report. December 2013, Issue 1,031.

[2]“WePay's Small Business Payments Survey Data Suggests the Death of Checks.” The Wall Street Journal. June 20, 2013.

[3]“WePay's Small Business Payments Survey Data Suggests the Death of Checks.” The Wall Street Journal. June 20, 2013.

[4]“WePay's Small Business Payments Survey Data Suggests the Death of Checks.” The Wall Street Journal. June 20, 2013.

[5] TSYS 2013 Consumer Payment Choice Study.

[6]The Nilson Report. December 2013, Issue 1,031.

[7]“Consumers Are Shifting From Debit Cards to Credit Cards.” Yahoo Finance. September 25, 2013.

[8]“Pulse 2012 Debit Issuer Study.” Pulse. 2012


Topics: Privacy, Retail Operations, Mobile Industry

Recent Posts