The social costs of paper and electronic payments

Abstract

In the United States, paper checks are the most widely used mechanism aside from cash to purchase goods and services. The use, production, and collection of paper checks is a costly process involving substantial societal resources. The most recent estimates of the total resources used in check processing were put forth in a 1987 paper by David B. Humphrey and Allen Berger. This paper updates the calculation of the total social cost of paper checks and their electronic substitute, automated clearinghouse payments.