Financial Update (First Quarter 2007)

Vol. 20, No. 1,
First Quarter 2007


Dennis Lockhart Named
Atlanta Fed President

Fed to Study Nation's
Payment Habits

Check 21 Continues
Brisk Growth

Atlanta Fed Joins
Poverty Research

Agencies Update Brochure
on Nontraditional Mortgages

Guidelines on Commercial
Real Estate Loans Issued

Bernanke Focuses on
Fed's Supervisory Role

New Atlanta Fed
Directors Named

$1 Presidential Coin
Program Begins

Fed Turns Money
Over to Treasury


Did You Know?

Data Bank

Circular Letters


Subscribe Online


Fed Announces New Study of Nation's Payment Composition

payments The Federal Reserve Banks will conduct another round of studies to determine the current makeup of the nation's retail payments market, including checks, credit and debit cards, and automated clearinghouse (ACH) transactions.

These two studies will build on similar research published by the Reserve Banks in 2001 and 2004. The earlier data indicated a dramatic shift in payments away from paper-based checks and toward electronic payments, such as debit cards, credit cards and ACH transactions.

Banks' participation will be key
"As the nation continues its migration from paper-based to electronic payments, we believe these studies will provide additional insight to help industry participants plan for the future," said Richard Oliver, an executive vice president with the Federal Reserve Bank of Atlanta and the Federal Reserve System's product manager for retail payments.

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"We're encouraging financial institutions and other providers of payment services to participate in these studies in order to help achieve robust and accurate estimates of payments usage in the United States," Oliver said.

According to research in 2001, the number of checks paid exceeded the number of electronic transactions, 41.9 billion to 30.6 billion. By 2004, the number of electronic transactions exceeded checks paid, 44.5 billion to 36.7 billion. These changes represent a 4.3 percent annual decline in checks paid and a 13.2 percent annual increase in electronic transactions during 2001–04.

Different studies for different payment methods
One study will quantify the number and value of checks being written in the United States. The check study will also attempt to determine the primary uses for check writing, something that was researched in the 2001 study but not in 2004. Another study will quantify the number and value of electronic payments.

The information for this round of studies will be collected during the first half of 2007 with results released later in the year. The Reserve Banks will work with Global Concepts Inc. for the check study and Dove Consulting for the electronic payments study. Both firms have experience with previous Federal Reserve studies.