According to a new national study spearheaded by the Federal Reserve Bank of Atlanta, an increasing number of consumers nationwide are using debit and credit cards to pay their bills and make everyday purchases and check usage continues to decline.

The study examined so-called noncash transactions — where individuals and companies pay for goods or services through means other than cash.

It found two-thirds of the $93.3 billion in noncash payments were made electronically nationwide last year, instead of by traditional checks.

In 2003, the last study period, electronic and check payments were roughly even, indicating both banks and consumers are increasingly moving away from checks and other traditional payment means.

The study, formally titled the 2007 Payments Study, is the second by the Federal Reserve System, and was organized by the bank’s Atlanta branch, which oversees all check processing for the U.S. central bank. (The Federal Reserve is the nation’s largest check processor.)

The study attempts to show broad trends in how banks and consumers use noncash payment methods, like debit and credit cards, or automated clearing house payouts and electronic benefits transfers.

The changes have been dramatic.

Most banks, the study found, now largely convert checks to electronic images when debiting and depositing to customer accounts.

Over the last three years, check usage declined, on average, 4.1 percent per year from 37.3 billion written in 2003 to 30.6 billion checks last year.

But the average value of each check has increased from $1,104 in 2003 to $1,366 in 2006, the study found.

Even cash is no longer king.

Debit cards, as a form of payment, grew at a 17.5 percent rate since 2003, with more than 25.3 billion transactions last year nationally, but the average value per debit transaction declined.

That data indicates debit card payments are replacing cash as well as checks in transactions.

The study surveyed roughly 1,400 financial institutions, and 65 card issuers, nationwide.

This entry was posted on Monday, December 17th, 2007 at 7:28 am and is filed under From The Street. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.