Changing the Habits of the Hard Core Check Writers

By Paul McAdam, Senior Vice President, Strategic Thought Leadership

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This month’s article profiles results from an FIS survey of 3,205 U.S. consumers to better understand their preferences for in-person and retail point-of-sale (POS) payments. We learned that there are elements of consumer preference and behavior that can be influenced to accelerate check migration. However, checks won’t disappear overnight and likely won’t decline much at all among some consumers without significant intervention. A full report on the research results can be found at

In 2012 the industry celebrates the 20th anniversary of the first debit card and the 30th anniversary of the creation of the ACH Network. Credit cards have been in existence for about 45 years. Yet 51 percent of consumers in our study reported writing at least one paper check within the past 30 days to make a payment in-person for goods and services (e.g., at the grocery store, shopping, dining out, gas station, entertainment, commuting, paying contractors/household help, etc.). Of course, this means that half (49 percent) of consumers have not used a check for in-person payments (see Figure 1).

Cash is still used most widely by nearly 90 percent of consumers for in-person purchases, while debit and credit cards are used by more than 60 percent on a monthly basis. The typical consumer uses a debit card nearly 13 times per month while cash and credit cards are used about 11 times. On average, consumers write 4.5 checks per month for in-person purchases. But since nearly half of consumers are not writing any checks all, those who do use checks write nearly nine per month on average.

Five Payment Type Segments

To help us understand the spectrum of payment utilization, we segmented our consumer sample into five groups based on usages of various payment methods for in-person purchases (Figure 2):

  • Cash Users
  • Debit Carders
  • Innovators
  • Paper Check Writers
  • Credit Carders

The Paper Check Writers segment makes fewer in-person payments per month than other segments (23 versus an average of 30 for the other segments). Paper checks and cash combined account for two-thirds and paper checks alone represent 41 percent of their in-person payments. Writing more than nine checks per month, they are the last of the truly hard core check writers. In contrast, paper checks only account for about 5 percent of the other four segments’ payments (they write fewer than two checks per month).

The Paper Check Writer segment generates 45 percent of all of the checks used for in-person payments. Changing this segment’s behaviors will not be easy, but it will pay dividends as it greatly accelerates the decline in paper check payments. The other four segments should be targeted for migration as well. Already they have largely transitioned away from checks, but on a combined basis they write 55 percent of the checks in the market. It should be much easier to convince or incent these customers to completely eliminate the one or two checks they write per month for in-person payments.

The sizes and demographics of the five segments vary widely (see Figure 3):

  • Paper Check Writers represent 11 percent of the consumer market. On average, they are older and their incomes are most concentrated in the lower-middle portion of the income spectrum. They also are more likely to be retired and have lower-than-average educations. Their demographics contribute to less spending and, thus, fewer payments.
  • Cash Users look very much like Debit Carders from a demographic perspective – down market and concentrated in Gen X and Boomer segments, although Debit Carders are slightly younger than Cash Users. Both segments represent a significant size of the population, at 27 percent and 34 percent, respectively. (Note: we grouped heavy users of gift and/or prepaid cards into the Cash User segment because the data revealed strong similarities between the two groups.)
  • Credit Carders are the most affluent and second-oldest segment and make up 26 percent of U.S. adults.
  • Innovators (high usage of mobile and contactless payments), at only 2 percent of the population, are younger and have the second-highest average incomes. Eighty-one percent of them are members of Gen Y or Gen X.

Obstacles to Driving Decline in In-person Paper Check Payments

Paper Check Writers are, no doubt, the bane of retailers because they hold up the line – irritating both shoppers behind them and retailers who are paying for cashiers’ time. Among different lines of retail trade, one-third (32 percent) of Paper Check Writers used paper checks as their payment method the last time they visited a grocery store and one-quarter (24 percent) used paper checks at discount stores/supercenters (e.g., Walmart, Target, Kmart). For the other four segments, the portion of consumers who used a check at these retailers was minuscule (only 1 – 2 percent).

The obstacle to migrating Paper Check Writers to credit card usage at POS has more to do with the perception of credit cards than not having access to them. Only 12 percent of Paper Check Writers do not have access to credit cards. Key reasons why Paper Check Writers, as well as other segments, are resistant to credit cards as a payment method are apparent when we look at how the segments rate the importance of various factors when making in-person payments (see Figure 4).

  • With the exception of Credit Carders, the majority of all segments, including Paper Check Writers, rate control over the timing of when funds are taken out of accounts as highly important.
  • All consumer segments, with the exception of Credit Carders, view having a payment method that helps them not spend beyond their means as highly important.
  • Only Credit Carders and Innovators, to a lesser extent, place a high level of importance on points or rewards when choosing a payment method.


Paper Checks Writers also think the cost of credit cards is high – much higher than the cost of debit cards. One-third (32 percent) rate the cost of credit cards as high or very high. In contrast, only 6 percent of Paper Check Writers rate the cost of paper checks and only 7 percent rate the cost of debit cards as high or very high. Paper Check Writers have more in common attitudinally with Debit Carders, which suggests that debit cards would be a more acceptable migration path than credit cards for Paper Check Writers.

When asked how disruptive it would be if retailers were to prohibit the use of paper checks at POS, one-third (34 percent) of Paper Check Writers felt it would be very disruptive. If forced to give up writing checks at POS, Paper Check Writers would more likely migrate to debit cards (41 percent) rather than credit cards (30 percent). Cash Users, Debit Carders and Credit Carders would migrate to their preferred payment methods, though Innovators would more likely use debit cards than any other payment method including mobile or contactless payment.

Intervention with the Carrot and the Stick

So what will motivate Paper Check Writers and other consumers to reduce their paper check usage and opt for in-person payments? The good news is there are elements of consumer behavior that can be influenced. Speeding up migration of paper checks will require “carrot and stick” intervention to overcome consumer inertia. Optimally, these incentives and disincentives would be implemented on a targeted basis.

  • “Carrots” include incentives such as:
    • Offering credit/debit/prepaid card rewards
    • Providing tools to track spending that are better than the check register
    • Ensuring security of payment methods and privacy of personal information
    • Promoting debit cards especially, with older customers and providing education on the benefits of using them at POS
  • “Sticks” include deterrents such as:
    • Instituting surcharges on paper check usage (retailer or financial institution)
    • Placing limits on the number of checks written per month (financial institution)
    • Merchants refusing to accept checks
    • Implementing “card-only lines” at food retailers

Regardless of incentives or deterrents, only a very small portion of consumers will continue to strongly resist paper check migration. Only 18 percent of Paper Check Writers and only 6 percent of all consumers within the survey population stated that nothing would persuade them to use fewer paper checks for in-person payments. Thus, the portion of consumers who appear to be intractable is quite small and our research suggests that most consumers could be motivated to migrate away from paper checks more rapidly.

In my next article I’ll discuss options for encouraging Paper Check Writers to use alternatives to paper checks for bill payment. As always, feel free to e-mail me ( with your questions, and I always welcome feedback on results your organization has achieved in migrating consumers away from checks.