Noncash Payments Forecast
Earlier this month, the Federal Reserve made available a summary of the 2007 Federal Reserve Payments Study. I have used these results, as well as previous payments studies to update the Payments Watch payments model. Preliminary results from this model are predicting that (for the United States) debit card use may surpass checks paid as early as this year, and that ACH and credit card use may both surpass checks paid by 2009. Longer term, at current trends, the model is predicting that checks as we know it may cease to exist before 2020.
Preliminary results from the Payments Watch model are shown below. Note that the model reflects checks paid, and not checks written. Checks paid are checks cleared as the original paper, substitute checks (IRD’s), by electronic check presentment or image exchange, but do not include checks converted to ACH or to other forms of payment. Therefore, the difference between checks written and checks paid is effectively the number of checks converted to ACH payments.
Number of Noncash Payments (billions)
The forecast model is based on trend analysis. More detailed notes on the model and how it was constructed will follow in subsequent posts. Below are sample data points (2000 - 2006 represent historical figures, 2007 - 2011 represent forecasted volumes):
Number of Noncash Payments (billions)
|
2000 |
2003 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
|
| Checks |
41.9 |
37.3 |
30.6 |
28.2 |
25.5 |
22.7 |
19.7 |
16.5 |
| Debit |
8.3 |
15.6 |
25.3 |
29.1 |
37.4 |
37.4 |
42.0 |
46.8 |
| Credit |
15.6 |
19.0 |
21.7 |
22.4 |
23.7 |
23.7 |
24.2 |
24.6 |
| EFT |
6.2 |
8.8 |
14.6 |
17.2 |
23.6 |
23.6 |
27.3 |
31.4 |
| EBT |
0.5 |
0.8 |
1.1 |
1.2 |
1.4 |
1.4 |
1.5 |
1.6 |
Sources: Historical data is from the 2007 Federal Reserve Payments Study, the 2004 Federal Reserve Payments Study and the 2001 Retail Payments Research Project. Forecast data is from the Payments Watch Payments Model.
Note: The Payments Watch model and therefore the results shown above are based on a trend analysis which includes both subjective interpretation of the data and opinion based on market research. Forecasts, in general, are notorious for being flawed. These results are provided on an "as-is" basis, without warranty of any kind, either expressed or implied, including, without limitation, warranties that the data is free of defects or fit for a particular purpose. The entire risk as to the quality of the model results is with you. Use at your own risk!
