Starting July 15, Americans will no longer be able to write checks to make purchases at Target. The decision by this major retailer has sparked curiosity and conversation about the continued use of checks in an increasingly digital world. Here’s what you need to know about checks, their history, why some people still use them, and their primary purposes.

The History of Checks

Checks have a long history, dating back to ancient civilizations. The modern check, as we know it, began to take shape in the 17th century in England. By the 19th and early 20th centuries, checks became a common method of payment in many parts of the world, including the United States. They offered a convenient and secure way to transfer money without the need for cash.

Key Milestones:

- Ancient Civilizations: Early forms of checks can be traced back to the ancient Romans, who used written orders called "prescriptiones" to transfer funds.

- 17th Century England: Goldsmith-bankers began issuing handwritten orders, known as "bills of exchange," to pay third parties.

- 18th Century: The check evolved into pre-printed forms provided by banks, standardizing the process.

- 19th Century: Banks began to offer checkbooks to account holders, making the process more user-friendly.

- 20th Century: The use of checks expanded globally, becoming a primary method of payment for individuals and businesses. The development of the MICR (Magnetic Ink Character Recognition) line in the 1950s streamlined check processing.

Why Some People Still Use Checks

Despite the advent of digital payment methods, some Americans continue to use checks for various reasons:

1. Familiarity and Habit: For many older adults, checks are a familiar and trusted method of payment. They have been using checks for decades and find comfort in their routine.

2. Lack of Digital Access: Not everyone has access to digital payment methods. Some individuals, particularly in rural or underserved areas, may lack reliable internet access or smartphones.

3. Record-Keeping: Checks provide a tangible record of transactions, which some people find useful for budgeting and tracking expenses. Physical checks also offer an easily traceable paper trail, which can be important for financial documentation.

4. Security Concerns: Some individuals prefer checks over digital payments due to concerns about online security and fraud. They believe that checks, when handled properly, offer a safer alternative to electronic transactions.

5. Specific Use Cases* Checks are still widely used for certain types of transactions, such as paying rent, making charitable donations, or paying bills to small businesses that do not accept digital payments. Additionally, some transactions, like government payments and certain business expenses, are still often conducted via checks.

The Decline of Checks

The use of checks has been steadily declining over the past few decades, largely due to the rise of electronic payment methods. Credit and debit cards, online banking, mobile payment apps, and electronic transfers offer faster, more convenient, and often more secure ways to pay.

Statistics:

- 1980s-1990s: Peak usage of checks in the U.S., with billions of checks written annually. In 1995, Americans wrote 49.5 billion checks.

- 2000s: Rapid decline as digital payment methods became more widespread. By 2009, the number of checks written had fallen to 24.5 billion.

- 2010s-Present: Continued decrease in check usage, with electronic payments dominating the landscape. In 2018, the Federal Reserve reported that check payments had decreased to 14.5 billion.

Target's Decision to Stop Accepting Checks

Target's decision to stop accepting checks is part of a broader trend among retailers to streamline payment processes and reduce costs associated with check handling. Checks can be time-consuming to process and are susceptible to fraud. By eliminating checks, Target aims to enhance efficiency and security at the checkout.

Impact on Customers:

- Transition Period: Target has provided notice to allow customers time to adjust their payment methods. During this period, employees are available to assist customers in understanding and transitioning to alternative payment methods.

- Alternative Payments: Customers are encouraged to use credit or debit cards, mobile payment apps like Apple Pay and Google Wallet, or cash. Target’s REDcard, which offers additional savings and benefits, is also a recommended alternative for frequent shoppers.

The Future of Payments

The future of payments is undoubtedly digital. Innovations in financial technology are making payments faster, more secure, and more accessible. Contactless payments, cryptocurrencies, and blockchain technology are just a few examples of advancements shaping the future.

Key Trends:

- Mobile Payments: Increasing adoption of mobile wallets and payment apps. According to eMarketer, mobile payment users in the U.S. are expected to reach 100 million by 2024.

- Contactless Technology: Growth of contactless payments for convenience and hygiene, accelerated by the COVID-19 pandemic. Visa reported a 40% increase in contactless transactions in the first quarter of 2020.

- Cryptocurrency: Emerging as a new form of digital currency and investment. Bitcoin and other cryptocurrencies are gaining traction as legitimate forms of payment.

- Blockchain: Potential to revolutionize the payment industry with enhanced security and transparency. Blockchain technology offers a decentralized method of processing transactions, reducing the risk of fraud.

Steps for a Smooth Transition from Checks

For those who are accustomed to using checks, here are some steps to transition smoothly to digital payments:

- Set Up Online Banking: Most banks offer online banking services that allow you to pay bills, transfer money, and monitor your accounts electronically.

- Use Mobile Payment Apps: Apps like Venmo, PayPal, Apple Pay, and Google Wallet provide easy and secure ways to send and receive money.

- Consider Automatic Payments: Set up automatic payments for recurring bills such as utilities, rent, and subscriptions to ensure timely payments without the need for checks.

- Use Debit and Credit Cards: Cards offer a convenient and widely accepted method of payment, often with additional security features such as fraud protection.

- Explore Digital Wallets: Digital wallets store your payment information securely and allow for quick, contactless transactions at the point of sale.

Conclusion

As Target prepares to stop accepting checks on July 15, it marks another step towards a fully digital payment ecosystem. While checks have a storied history and remain in use by some individuals for specific reasons, their overall decline is evident. For those still using checks, it’s an opportunity to explore and adopt modern payment methods that offer greater convenience and security. The transition to digital payments continues to accelerate, promising a future where financial transactions are more efficient and accessible for everyone.