If you’ve written a check, had to scrounge for an envelope and stamp, and then tried to find a mailbox, you realize pretty quickly why paper checks are being usurped by an array of digital payment methods. Nowadays, our phones can do just about anything we need them to do, payments included. The same is true of our computers, laptops, and tablets.
Bill pay has made managing payments pretty sweet, especially for those pesky recurring ones. And newer technologies, like person to person payments, can make life easier when it comes to paying.
As young people vote with their mobiles, it seems that checks are increasingly making way for online banking and mobile apps as the current account features of choice
A Generation Thing
Imagine you’re thinking of switching current account providers and to help you decide which one to pick you to make a list of your priorities. Would have the ability to pay by check be on that list?
Chances are you answered ‘no’ – and you wouldn’t be the only one. Research* conducted on our behalf recently revealed that checks are far from a priority for most of us. In fact, just one in five respondents revealed they would prioritize having a checkbook when choosing a new account provider.
However, checks were found to be even less popular with young people than the population as a whole. Just 3% of 18 to 24-year-olds said they would like to have access to a checkbook, while only a tenth of 25 to 34-year-old wanted one.
In comparison, more than a quarter of 18 to 24-year-olds said having a mobile banking app would be their priority, and more than three quarters wanted online banking. And among 25 to 34-year-olds, the number of people demanding online banking is even higher, at 84%.
Rise of the Machines
Plastic is probably the biggest reason for the decline in popularity of check. Debit cards were introduced in the 1980’s, in part to give people an alternative to paying by check while out shopping.
Whіlе dеbіt саrds mеаn рауіng bу сhесk іn stоrе іs lеss соmmоnрlасе іt’s thе іnсrеаsіng рорulаrіtу оf оnlіnе аnd mоbіlе bаnkіng thаt’s hеlреd рush сhесk еvеn furthеr оut оf fаvоr. Сhесks wеrе оnсе usеd аs а wау оf gіvіng реорlе wе knоw саsh, реrhарs fоr а gіft оr bесаusе wе wеrе рауіng thеm fоr оur shаrе оf sоmеthіng. Тоdау, mоst реорlе саn sіmрlу lоg оn tо thеіr bаnk ассоunt оnlіnе аnd trаnsfеr thе mоnеу аt а сlісk оf а mоusе.
If Not by Check, How Do You Pay?
While debit cards remain the go-to payment option for many, mobile payments have also shown steady growth in the last few years. According to the 2015 Federal Reserve survey, consumers and mobile financial services, 24 percent of mobile phone owners report having made a mobile payment in the previous 12 months. The three most common transactions were paying bills (65 percent), purchasing a physical item or digital content (42 percent), and paying for something in a store (33 percent).
The report also says the use of mobile payments has increased over time: in 2011, 23 percent of smartphone users reported using mobile payments, by 2014, usage of mobile payments had grown to 28 percent.
Impact of Banking Apps
The Federal Reserve report shows that a new trend – mobile banking – has given our antiquated paper checks a foothold for the future. Using paper checks, bank customers can quickly transfer and deposit money with their phone and tablet apps.
“Paper check writing continues to persist as a significant portion of non-cash payments, but interbank processing and clearing of these checks are virtually all electronic,” the study said.
Ѕо what’s nехt?
It’s clear that payments are moving towards the digital world, as is almost everything else in our daily lives. However, there still exists the desire to pay by check or even accept check payments. As there is a desire for immediacy, there also exists the “float” mentality that only comes with checks. So will we ever lose the possibility of checks? Probably not. But it’s safe to say that a merging of the two worlds will continue to unfold.