Checks & Balances

CHECKS & BALANCES DON'T KISS THE PAPER CHECK GOODBYE JUST YET. CHECKS REMAIN THE PRIMARY PAYMENT METHOD FOR SMALL BUSINESS, A PREFERRED OPTION FOR MANY CONSUMERS, AND THE DRIVER OF INNOVATIONS LIKE ECHECKS AND REMOTE DEPOSIT CAPTURE (RDC). $C CHECK USAGE CONSUMERS SMALL BUSINESS 5.8 27.8 CHECKS/MONTH CHECKS/MONTH CONSUMERS 58% BILL PAYMENT FOR WHAT PURPOSE? 16% PAYMENT TO INDIVIDUALS 11% PURCHASES 15% OTHERS WINNER: WHERE'S DECLINE IN CHECK USAGE SLOWED DRAMATICALLY BY 2012, THE MOST COMMON POINT-OF-PURCHASE SUGGESTING THAT THE STEEPEST DECLINE IS PAST, AND CHECK USAGE WILL MAINTAIN A MORE STABLE RATE. FOR CHECKS? 2004 2007 2010 2012 25% OF PEOPLE PAY 6.1% 5.8% AT THE DOCTORS/DENTIST 8.2% OFFICE WITH A CHECK. 9.1% CHECKS WIDELY ACCEPTED 84% OF RETAIL BUSINESS 96% IN ALL OTHER INDUSTRIES BUSINESS CHECKS ARE THE PRIMARY PAYMENT TYPE 10 BILLION FOR B2B TRANSACTIONS A YEAR TRANSACTIONS IN THE USA. INCOMING OUTGOING CHECKS ARE THE SINGLE LARGEST PAYMENT TYPE CHECKS ACCOUNT FOR MORE THAN HALF OF OUTGOING TO SMALL BUSINESSES. PAYMENTS. CHECKS 31% 29% CHECKS (NON PAYROLL) 22% CHECKS (PAYROLL) CREDIT & DEBIT CARDS 28% 29% OTHER PAYMENTS OTHER PAYMENTS 22% 16% CREDIT & DEBIT CARDS 4% CASH CASH 19% WHY WHY CONSUMERS BUSINESSES PREFER NOT RUNNING UP CREDIT BALANCES PREFER BETTER RECORD KEEPING CНЕCKS? CHECKS? 11 ACCURATE ACCOUNTING BEING ABLE TO STOP THE CHECK PROOF OF PURCHASE ACCEPTED EVERYWHERE (ONLY OPTION SOMETIMES) LESS FRAUD MEETS VENDOR REQUIREMENTS PREMIUM USERS CHECK USERS MAKE GREAT ACCOUNT HOLDERS THEY TEND TO HAVE BIGGER BALANCES AVERAGE CHECK-WRITING AFFLUENT HOUSEHOLDS 7.7 CHECKS/MONTH FREQUENCY TENDS TO INCREASE WITH INCOME. REGULAR CONSUMER 5.8 CHECKS/MONTH THEY ARE WILLING TO PAY FOR PRIVILEGES USERS SELECTING UNLIMITED CHECK-WRITING AS A “MUST HAVE" UNLIMITED CHECK WRITING? UNLIMITED CHECK WRITING? V NOT IMPORTANT V MUST HAVE FEATURE WERE THREE TIMES MORE LIKELY TO SELECT CHECKING ACCOUNTS WITH HIGH MONTHLY SERVICE FEES $10-$20 16% 19% FEE $20 2% 6% FEE OR MORE PAPERLESS INNOVATION INNOVATION IS BRINGING US THE PAPER CHECK, MINUS THE PAPER. REMOTE DEPOSIT CAPTURE (RDC) AND ELECTRONIC CHECKS (ECHECKS) ARE PENETRATING THE MARKET WITH REMARKABLE SPEED. 2.1 RDC PROJECTIONS FOR 2016 38% BILLION CHECKS PROJECTED TO MIGRATE TO MOBILE RDC FROM 2% OTHER CHANNELS, WITH MOBILE RDC. 2011 2016 ECHECKS SAVE SMALL BUSINESSES AROUND $1 PER TRANSACTION IN COSTS CHECKS ARE GREAT FOR FINANCIAL INSTITUTIONS. THEY KEEP YOU AT THE CENTER OF RELATIONSHIPS, AND PROVIDE FEE INCOME OPPORTUNITIES WHILE BUILDING STRONGER RELATIONSHIPS WITH ACCOUNT HOLDERS SOURCES: The Financial Brand: Bank Switchers who Love Checks Willing to Pay More Fees Synergistics: A New perspective on Consumer Paying Habits Mitek systems: Mobile Remote Deposit Capture FIS/NACHA: Still paying with paper DELUXE, CORP