Decline in Paper Check Usage Reaches a Low Point
In the past few years, there has been a significant shift in the way people make person-to-person (P2P) payments. According to recent data, the share of P2P payments made using cash, checks, or money orders has dropped dramatically, from 87% in 2015 to just 45% last year.
This decline in check usage is part of a larger trend towards digital P2P apps. In 2015, 17% of P2P payments were made by check. By 2024, that figure had dropped to a mere 6%.
The convenience and speed of digital payment methods are driving this change. Consumers across all demographics find checks less convenient, less secure, and slower compared to electronic payment methods.
This shift is not limited to personal transactions. Businesses and government agencies have also adopted new payment acceptance technologies that support cards, bank transfers, and mobile apps. As a result, government disbursements are moving away from paper checks, with the federal government pushing for electronic payments since 2011.
Despite challenges such as unbanked populations, rural communities with limited internet and banking access, and elderly individuals who still rely on paper checks, the trend towards digital payments is clear. Today, more than half of all P2P payments are completed using a card, bank transfer, or funds stored in an app.
The shift towards digital P2P apps has also resulted in a decrease in the use of cash, checks, and money orders for P2P payments. This trend has been broad and consistent from 2015 to 2024. Even among baby boomers, who are often considered loyal to checks, there has been a significant drop in check usage, with a decline from more than 10% to 5% between 2015 and 2024.
The Trump administration has set September 30 as the target date to eliminate paper checks for government disbursements. As of last year, 23% of benefit recipients still received assistance in the form of checks or vouchers from the federal government. However, with the growing preference for digital payments, this number is expected to continue to decline.
In summary, the decline in the usage of checks for consumer transactions and government disbursements is mainly due to consumers perceiving checks as less convenient, less secure, and slower compared to electronic payment methods. Additionally, payees—businesses and government agencies—have increasingly adopted new payment acceptance technologies that support cards, bank transfers, and mobile apps, enabling payments through faster and more user-friendly digital methods. As a result, digital payment technologies and services that facilitate card payments, bank transfers, mobile wallets, and financing options like Buy Now, Pay Later have become the preferred alternatives for both consumers and payees in business and government transactions.
- The preference for digital payment methods among consumers and businesses has resulted in a decline of checks and cash in various transactions, as digital solutions are perceived as more convenient, secure, and faster.
- In both consumer and government transactions, there is a growing trend towards the use of digital payment technologies and services, such as cards, bank transfers, mobile wallets, and financing options like Buy Now, Pay Later, as they offer faster and more user-friendly solutions compared to traditional methods like checks and cash.
