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Discussion Boards > Remote Deposit Capture Discussions > Fed Payments Study / Implications for the RDC Industry View modes: 
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John - 12/19/2019 3:52:54 PM
Fed Payments Study / Implications for the RDC Industry
Today, the Federal Reserve released their initial findings of the 2019 Federal Reserve Payments Study. You can download a pdf of the report by clicking here. Here is a quick snapshot, with several highlights direct from the report;
  • Noncash payments reached record levels in 2018.
    • The number of core noncash payments, comprising debit card, credit card, ACH, and check payments, reached 174.2 billion in 2018, an increase of 30.6 billion from 2015.
    • The value of these payments totaled $97.04 trillion in 2018, an increase of $10.25 trillion from 2015.
  • Noncash payments are experiencing accelerating growth.
    • By number, the growth rate of core noncash payments was 6.7 percent per year from 2015 to 2018, higher than the growth rate of 5.1 percent per year from 2012 to 2015.
    • By value, the recent growth rate (3.8 percent per year) was slightly higher than the growth rate of the prior period (3.6 percent per year).
  • Card-related payment growth rates are outpacing ACH.
    • Total card payments (both credit and debit), which represented 7.3 percent of core noncash payments by value and 75.3 percent by number in 2018, grew at a rate of 8.9 percent per year by number between 2015 and 2018.
    • Total ACH payments, comprising both credit transfers and debit transfers, grew 6.0 percent per year by number and 7.2 percent per year by value from 2015 to 2018.
  • Checks continue their decline, but still account for 16 Billion payments and over $26.2 Trillion in value in 2018.
    • Average check size is up to $1,635.
    • Checks now account for 8.3% of noncash payments volume and 26.6% of noncash payments value.
While there were no real surprises in this initial data, since we are we obviously need to think about the implications for the RDC industry. Here are my thoughts;
  1. Checks continue to be important. Greater than 26% of the value of all payments are done by check. Compare this to just 7.3% for Cards.
  2. The decline of the paper check will continue, as it is replaced by other payment types from ACH and Cards to alternative payment types like Zelle, Paypal, Venmo and others.
  3. It would have been great to see other payment types like Zelle, Venmo, Paypal, etc. included in this report. I believe a growing percentage of the decline in check usage among consumers is due to these types of alternate payment methods.
  4. While checks may quickly losing their importance among consumers, they remain important to businesses. -But how long before businesses turn to alternative payment methods as well?
And so, I pose the following questions to the industry (and hope we can discuss here);
  1. What do you think the implications of these payment trends are for the RDC Industry?
  2. How is your FI helping clients (especially businesses) manage the growing complexity of payments options?
  3. How can your FI remain relevant by leveraging your investments in RDC to create a platform which can accept all the various payment types businesses are faced with (think Integrated Receivables)?
What's your take??

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