Upfront: Check Payments To Bow Out?

Electronic payment types are poised to replace the check for transferring funds.

Pundits have been predicting the death of the corporate check for over 30 years, but now the end may finally be in sight. A combination of electronic payment types are poised to replace the check as the primary vehicle for transferring funds between two commercial parties, according to research by Needham, Mass.-based TowerGroup, a consulting firm that focuses on the financial services industry.

The research cites several factors that signal the approaching demise of check payments, including recent Federal Reserve estimates of noncash payments, major corporate surveys, the passage of Check 21 and globalization.

"Many business-to-consumer payments are already made electronically, and a majority of U.S. corporations indicate plans to migrate the bulk of their business-to-business payments to electronics within three years," says Susan Feinberg, senior analyst in TowerGroup's wholesale banking research service and author of the research.