Credit cards becoming more popular than checks
September 12, 2005
According to the president of the Federal Reserve Bank of Philadelphia, paper checks are rapidly being replaced by credit cards and debit cards as the most popular way, other than cash, to pay for goods and services in the United States.
In remarks before the Pennsylvania Association of Community Bankers, Anthony Santomero said that only around 45 percent of non-cash payments for retail purchases are paid for by paper check now, while the balance are paid for through electronic means.
If the current rate continues, both credit cards and debit cards will individually surpass paper checks as methods of payment. In addition, many paper checks are now cleared by many banks using an electronic clearing system that transfers an image of the check rather than the check itself.
Mr. Santomero commented that this trends shows an evolution in the nation’s pattern of payments and that this evolution will continue as new innovations in payment technology are made. He also said that the Federal Reserve has encouraged these new technologies.
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