Three Reasons Check-Writing Is Becoming A Lost Art

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Bringing us the millennial point of view is Katherine Joyce, rising senior and finance major at the University of Notre Dame. She participated in Charles Schwab’s summer program for financial advisors of the future, and interned in our office in July.

by Katherine Joyce, Finance Major, University of Notre Dame

“I’ll pay for the cab and you can just venmo me.” This has become a common phrase amongst millennials. Mobile phone applications such as Venmo, Square Cash, Snap Cash, and others allow for seamless online payment to friends and have the potential to render traditional check writing completely obsolete.

Brandon, my fellow intern, and I are both twenty-one years old. We have paid rent and utility bills; we have purchased our own groceries; we have even sent money overseas. But neither of us has ever written a physical check.

We are not alone. According to a 2014 poll, 61.2% of banking customers age 18-24 reported that they “never write checks.” Why is check-writing, once so common, becoming a lost art?

  1. Retailers.  Many retailers simply do not accept checks anymore. Among these retailers are major brands such as Whole Foods, Lululemon Athletica, Gap, and Banana Republic. These represent a variety of sectors that have decided that eliminating checks will help them save time and avoid transaction fees. Lindsay Robinson, a Whole Foods spokesperson, argues that only accepting electronic payments and cash will help customers as well by “reduc[ing] wait times in line.”
  2. Online Shopping.  E-commerce giants such as Amazon and Zappos have facilitated the growth of online shopping. Consumers value their time and online shopping allows them to make purchases quickly and easily without ever having to leave the house. E-commerce is on an upward trajectory and in 2018, the web is expected to account for 11% of total retail sales. Online retailers thrive because of the ease of virtual payments. Neither Amazon nor Zappos accepts personal checks, preferring debit cards, credit cards, and other forms of electronic payment. The increasing size of the e-commerce sector and its avoidance of personal checks have also contributed to their abandonment.
  3. The Millennial Mentality.  Millennials use electronics to talk to their friends, check the weather, order a pizza, and hail a cab. We have an “anywhere, anytime” mentality and expect everything to be at our fingertips. Going into a physical bank is tedious. Remembering to bring along a checkbook is exasperating. We carry our phones everywhere and we expect to be able to use them for monetary transactions as well. Applications such as Venmo have made this possible by allowing users to connect their debit cards to a mobile phone application and virtually transfer money to friends for free, rejecting traditional check writing in favor of an online solution. With a growing $200 billion in annual purchasing power, millennials have the potential to change the payment landscape.

checks decliningThough the number of checks written per year has greatly decreased, they are not yet obsolete. There were still roughly 18 billion checks written in 2012 according to a Federal Reserve Payments study. However, the inclination seems to be away from paper. The graph at right, from the Dallas Morning News, shows the downward trend in number of checks written from 2003 to 2012. The rising generation is ditching checks in favor of online alternatives and this trend is likely to continue as more stores disallow checks and online shopping continues to grow.








About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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