According to the Bank for International Settlements, a check is a written order from one party (the drawer) to another (the drawee, normally a bank) requiring the drawee to pay a specified sum on demand to the drawer or to a third party specified by the drawer. It is similar to a bill of exchange or a draft.
Data is from the Bank for International Settlements’ Statistics on payment, clearing and settlement systems in the CPSS countries. Report published January 2013 with figures on 2011.
Use of Checks by Non-Banks (Total Number of Transactions in Millions, 2011)
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* Sum or average excluding those countries for which data are not available. For credit transfers, data for France (prior to 2005) and the United Kingdom include interbank transactions; however, the total number is relatively small.
Use of Checks by Non-Banks (Total Value of Transactions in USD Billions, 2011)*
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* Converted at yearly average exchange rates, except as noted.
** For credit transfers and e-money payment transactions, total transactions during the fiscal year ending March of the following year, converted at average fiscal year exchange rates.
*** Sum or average excluding those countries for which data are not available. For credit transfers, data for France (prior to 2005) and the United Kingdom include interbank transactions. Since the value of these transactions is relatively large, cross-country comparison should be treated with caution; consequently, CPSS figures related to credit transfers have not been calculated.
Check usage worldwide has been in a long, slow decline for many years, and continues to become a less-important payment mechanism as electronic forms of payment take greater hold of the non-bank payments environment.
However, checks continue to represent one of the most used modes of payments – both for companies and for consumer – worldwide, but especially in certain countries, such as the US, Singapore, and China. In 2011, checks accounted for 60.6% of total transaction volume across payment instruments in BIS countries that made data available. In Singapore, they comprised 67.1% of all payments, in Canada 50.5%, in China 38.2% and in the US 37% . However, this figures all represent a year-on-year decline and, overall, the use of checks across BIS countries did decrease 14%, by value compared to 2010.
It also decreased by number of transactions (6.9%,) dropping a whopping 57% in Russia, 30.4% in South Africa and nearly 20% in Switzerland.
In the US, since the enactment of the Check 21 Act in 2004, electronic images of checks have been recognized as legal documents. Technology, such as remote deposit capture, enables electronification of a check at some point during its lifecycle. This has likely slowed the process of reducing check usage in the US market. However, that process continues, and other payment mechanisms are beginning to grow in importance. As a result, since 2007, the number of checks written in the U.S. has decreased from 28 billion to 21 billion in 2011.
