Sat, 18 Sep 2004

A new law hastens the check's demise. But is that a good thing?

Given the security flaws that exist in current "paperless" payment methods, I try to stick to checks for bill payments. I never let a merchant automatically debit my bank account: I will let them tap credity cards for monthly payments, but only because credit cards have that Federal liability limit in place. Debit cards (and checking accounts) don't.

The rise of cheaper and faster payment alternatives such as credit cards, debit cards, and online banking started eating into the check's market share in the 1990s. And next month, a new law takes effect that will eliminate many of the check's few remaining advantages for consumers. As a result, the current 4 percent-a-year decline in check writing is expected to accelerate. Within a generation, checks are likely to be a rarity, used only by a few stubborn oldsters or in special situations, such as giving a nephew money as a graduation gift.

(link) [U.S. News & World Report]

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