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Federal Study Confirms that Electronic Payments are on the Rise

In order to achieve a better understanding of payment trends, the Federal Reserve launched their fifth in a triennial series of payment studies in 2013. Excluding wire transfers, the study showed that there were an estimated 122.8 billion non-cash payments made by Americans in 2012. This adds to the $79 trillion total shown throughout the course of the study. This shows that there has been a 4.4 percent increase in these types of transactions between 2009 and 2012. This growth rate was just 0.3 percent short of the 4.7 percent annual rate that was recorded for the ten year period that ended in 2012. This data also includes checks written by consumers. Although fewer checks are being written, those that are have been to cover larger amounts, and the checks that are written often clear electronically. The Federal study showed that one out of every six checks that was written in 2012 was deposited using a cell phone electronic image or other remote capturing deposit option by payees.

The study also showed that use of general-purpose credit cards has increased by 6.8 percent a year between 2009 and 2012 since their earlier decline in use between 2006 and 2009. Transactions using general-purpose credit cards have grown from 21 billion transactions during their decline, to 26.2 billion in recent years. These figures from the study are in direct proportion to the growth of prepaid debit card use, which has risen to overtake all other forms of non-cash payments. This form of payment use has grown to 15.8 percent a year to reach a total of 9.2 billion in 2012.

A result of the increase in credit and debit card use has resulted in an increase in fraud according to data published by the Federal Reserve. They estimate that 31.1 million fraudulent transactions valued at $6.1 billion happened in 2012. These numbers were significantly higher compared to any other non-cash payment method. These figures could possibly be linked to businesses that use high risk merchant accounts. Although businesses that use high risk merchant accounts are not inherently bad, these types of businesses are more susceptible to fraud. They often do a higher volume of sales that require multiple transactions and can include online shops, merchants that deal in downloadable software, or gaming websites which all require the use of customer’s credit card information.