Though electronic banking has seen increased popularity in recent years – and is the preferred method for many transactions – paper checks remain a highly-used method of payment in the United States, according to Mt. Prospect, Ill.-based Cummins Allison.

According to the 2010 Federal Reserve Payments Study, 24.4 billion checks are written in the U.S. annually and checks written from person to person have increased by 3 percent per year between 2006 and 2009. Although the use of credit cards and electronic payment offer the convenience factor, paper checks present certain benefits that electronic methods cannot:

Security

Paper checks offer a sense of security during financial exchanges, especially for older generations who are even more hesitant to adopt electronic payment methods due to security concerns. Checks also leave a paper trail that can be easily followed, especially in the case of an incorrect payment.

Careful Spending Habits

Actively writing a check and regularly balancing a checkbook promote careful and conscious spending, while the use of credit cards can lead to impulsive buying habits. According to New Braunfels, Texas-based SuperValue Checks, credit cards can motivate consumers to spend as much as 30 percent more on purchases than if they paid with cash or check.

Business and Personal Transactions

Checks remain a widely accepted form of payment, particularly in business transactions. According to the Federal Reserve, from 2006 to 2009, business-written checks increased by 5 percent and accounted for 82.8 percent of the total check value. Checks are also frequently given as gifts because they can be used anywhere and at any time, compared to gift cards that can be redeemed only at specific retailers and often have expiration dates.

Cost-Effective

With nearly $1 trillion in U.S. currency circulated last year, traditional payment methods remain highly cost-effective. Cash and checks complement one another, as checks are a way to carry large amounts of cash without the risk of handling the currency, while consumers find carrying currency more preferable to writing out checks.

Cummins Allison has a 125-year heritage of leadership in technology and product innovation and currently serves the majority of financial institutions worldwide.

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