Jackie Spinner reports on the growth in electronic payments.

Checks still account for nearly 60 percent of all retail non-cash payments, according to Federal Reserve data. By comparison, electronic payments made up 7.9 percent of the pie in 2000. The Fed, which actually does not process the majority of checks written, now believes that check writing has peaked, for real. In an August 2002 report, the Fed said it appears that the number of checks written began to decline sometime in the mid-1990s after a high of 49.5 billion in 1995. A key point: Electronic payments are growing, at a rate of 18 percent from 1979 to 2000, compared with a growth rate of 1.2 percent for checks in the same period.

An excellent overview (by Terri Bradford, Matt Davies, and Stuart E. Weiner of the Federal Reserve Bank of Kansas City) of the US payment system and the many roles that nonbanks play in the system. PDF format.

Nonbanks have always been a key component of the nation‚s payments system. In recent years, however, nonbanks have become even more prominent. This heightened visibility raises several questions. What payments activities are nonbanks engaged in? What roles do nonbanks play in specific payments types? What types of risk are potentially associated with nonbank participation? This paper begins to address these questions. Preliminary findings include: (1) Nonbanks are involved in a myriad of activities and roles, both in traditional and emerging payments types; (2) Nonbank business relationships with banks and other participants in the payments systems are often highly complex and interrelated; (3) Nonbanks are rarely directly involved in settlement activities and, hence, appear to be associated with limited settlement and systemic risk; (4) Both nonbanks and banks appear to be increasingly susceptible to operational risk factors.

CNN carries an AP wire story about Moneo, the new French electronic purse chip cards. A friend, just back from Paris, notes that many Parisians don't like all of the change introduced by the conversion to the Euro. It's some of those subtle consumer convenience advantages that may just result in success. But some don't agree:

"We all know that the future of money is completely virtual," said Torris, the Forrester analyst. "Moneo is a first step toward that." Try telling that to Christine Berube. She is refusing to offer the service at her tobacco counter in a dimly lit bar that serves up endless glasses of cheap table wine and cups of coffee to mostly elderly regulars. "I think it's useless," the 46-year-old tobacconist said to nods of agreements from clients who draw heavily on their cigarettes. "I know how to count change quickly and don't want to enrich the banks."