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• Cards were used most frequently in 2021, accounting
Insider’sreport for 84 percent of the increase in the total number of
noncash payments since 2018.
on payments • Stellar growth in the total value of payments was

driven almost entirely by increases in the value of
ACH payments.
Americans amp up A closer look: checks and ACH

electronic payments I've always been a big fan of checks, but even I have to admit
that checks just don't cut it for most Americans anymore.

By Patti Murphy Myself included. I haven't written a single personal check
yet this year, and I only wrote two last year.
ProScribes Inc.
My business is a different matter, where I've written eight
lame, or credit, the pandemic. Or maybe it's a or 10 checks this year, mostly paychecks. I tend to think
sign of the coming of age of Gen Z, the only the lion's share of checks in the United States are being
generation born into the digital age. Whatever written by businesses. Back in 2018, the Fed reported
B the reason, noncash payments in the United that 60 percent of checks, by volume, were written by
States are growing at a rapid clip. businesses and government agencies.

The Federal Reserve reported that in 2021, Americans The annual total number of checks written fell from 15.5
made 204.5 billion ACH, card and check payments with billion to 11.2 billion between 2018 and 2021. The total
a combined value of $128.51 trillion. That represents a 9.5 value of checks written increased by $460 billion to total
percent increase in value each year since 2018, when we $27.23 trillion. The average check in 2021 was for $2,430.
made 173.7 billion payments valued at $98 trillion. And it's
three times the rate of increase in total electronic payments Between 2018 and 2021, the combined annual growth
values registered between 2000 and 2018, the Fed said. rate (CAGR) for checks was minus 2.8 percent, the Fed
said; the CAGR for the value of checks written was 0.46
Keeping tabs percent. Even checks that get converted to ACH payments
(at the POS, for example) are on the wane. There were 800
Every three years, the Federal Reserve undertakes the billion worth a combined value of $240 billion in 2021,
monumental task of assessing the use of various types representing a three-year CAGR of minus 19.2 percent in
of payments. The Federal Reserve Payments Study is a volume and minus 15.8 percent in value.
collaborative effort of the Federal Reserve Board and the
Atlanta Federal Reserve Bank. It has developed aggregate The ACH was created as an electronic alternative to checks
estimates, every three years since 2001, using data collected in the 1970s, but it took until 2009 for ACH payments to
from financial institutions, the card networks and major surpass check usage and become the highest value form of
processors.
noncash payment method used by Americans.
So massive is the data collection effort, that it has always In 2021, the ACH network carried 36.2 billion payments
taken multiple years of parsing data to develop these worth a total value of $91.85 trillion. The average ACH
estimates. In fact, the Fed explained in a press release that payment was $2,536. By comparison, there were 28.5
it was only reporting "initial findings" of the study now billion ACH payments in 2018, worth a combined $64.16
and that, "Additional details will be available as analysis trillion. So, the three-year CAGRs for ACH payments were
is completed." 8.3 percent (volume) and 12.7 percent (value).

Given my tenure in the payments space, it shouldn't ACH debits (for example, transactions for phone
surprise anybody that I have been following this data and internet purchases) outpaced credits (like direct
quest from the get go. I consider this Fed study to be the deposit)—20.3 billion compared to 15.9 billion—in 2021.
most comprehensive and reliable source of information on But the total value of credit transfers ($58.66 trillion) far
retail payment trends. Hands down. exceeded that of debits ($33.19 trillion).
Top line: ACH and cards rule
At some point, I expect FedNow, the Fed's real-time
For those readers who don't necessarily like reading payment network, to start throwing shade on the ACH.
through a lot of numbers, here are the topline results The use cases for real-time payments are many and include
reported by the Fed: time-sensitive applications that the ACH simply can't
process fast enough. Think in terms of payroll applications
• Every single noncash method of payment saw big like earned wage access and payments to gig workers; POS
increases in usage from 2018 to 2021, except for payments; consumer bill payments; and business supplier
checks, which took a nosedive. payments, refunds and adjustments.
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