Dive Brief:

• The U.S. outranked 19 other countries in the percentage of checks used vis-a-vis all cashless payments in 2021, according to a recent report from the Federal Reserve Bank of Atlanta. In that year, the proportion of checks was 5.1%, which was a decline from 2012 when they comprised 17.4% of U.S. cashless payments.
• Though check usage in the United States has declined, it remained higher than in other countries, relative to the country’s population, according to the July report. The compound annualized growth rate of U.S. check usage slowed to 6.7% between 2012 and 2020, but the United States still had the highest per-capital check usage among the 20 countries surveyed, with 30.13 checks per capita, the report said.
• The U.S. ranked third, behind Canada and Singapore, respectively, with respect to the total value of checks used as a percentage of overall cashless payments in 2021, with a 19.6% share, the report said. That was a decline from 35.1% in 2012.

Dive Insight:

The Fed’s latest check use report points to the persistence of checks in U.S. payments relative to other countries. Though the proportion of checks used in India’s cashless transactions surpassed the U.S. at 44.4% in 2012, the figure in that Asian country dropped to 1.1% in 2021, the Fed said.

In 2021, the U.S. took the top spot in the number of checks used for cashless payments at 5.1%, followed by Canada (4.1%), France (4.1%) and Mexico (1.6%).

The decline in check use for most countries comes as digital forms of payment are increasingly used by consumers who can often tap their phones to access payment apps.

Other Fed research also suggests that checks have been on the decline in recent years. Another Federal Reserve report last year showed that checks as a share of noncash payments dropped between 2018 and 2020, both in terms of volume and value. The report suggested the COVID-19 pandemic that began in 2020 has changed consumers’ payment behaviors. 

The use of cash is also lower. A Gallup Poll released a year ago found that only 13% of survey respondents make the majority of their purchases in cash, down from 28% five years prior to the poll.

Now that the U.S. has launched its FedNow instant payments system, check usage could slide even further. In July, the Federal Reserve Board announced the arrival of the real-time payments system, which as of last month had attracted some 50 bank users. During Jack Henry’s Q3 earnings call in May, the company’s president Greg Adelson said the new system could replace check payments for business-to-business transactions.