The Future of Remote Consumer Payments in the US

March 4, 2002



New York, NY, USA March 4, 2002

: The War on Checks  

Celent Communications estimates large reserves of efficiency gains lie in remote consumer payments in the US. The shift from paper checks to e-payments in remote payments represents a US$8bn market opportunity in processing fees.

In a new report, : The War on Checks, Celent examines the market opportunity in remote consumer payments based on a comparison with Europe, and scrutinizes the challenges faced by Payment Services Providers (PSPs) in this market and their responding strategies.

"There is a major discrepancy in the US between the wide use of the Internet to  conduct business and the sluggish adoption of e-payments. In non-face-to-face payments, the US lags years behind other advanced economies such as those of Western Europe. While Americans stick to checks and snail mail to settle their bills, Europeans favor electronic debit. The check is such a pervasive instrument that even credit cards, commonly touted as best-of-breed e-payment instrument, depend on checks for bill payment,"

comments Gwenn B騷ard, the author of the report. As a result, 83% of remote payments in the US are processed by checks versus 10% in Europe. In the US, remote payments are the "raison d底tre" of checks. In 2001, 62% of total check volume and 55% of personal checks were written for remote payments.

In this report, Celent identifies the key trends that will shape the market in the next 2-3 years. Among them are the surge of new payment schemes similar to those provided by credit card associations; the advent of a FedEx-like approach in consumer servicing; the rise of closed-end networks; the decrease of merchant fees charged by card associations on the Internet; the rising role of credit supply as a trigger for e-payment adoption; and the latent resistance of banks to shift aggressively to e-payments thanks to their reliance on check-related revenues.

The following companies and associations are mentioned in the report: American Express, Bank of Montreal, Bibit, Billpoint, Cashedge, Certapay, Checkfree, CIBC, Citibank, C2it, Discover, eBay, Federal Reserve, HSBC, Mastercard, Paypal, Project ACTION, ORCC, Scotiabank, TD Canada, Visa, Wells Fargo, Yahoo! Paydirect.

A Table of Contents is available online.



of Celent Communication's Retail Banking research service can download the report electronically by clicking on the icon to the left.



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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents


  New York, NY, USA  March 4, 2002

Return to report Abstract


  The Rule of Checks 8
  The Revenue Opportunity 10
  The Challenges 15
  Responding Strategies 24




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