Cost Savings from Check 21 Electronic Payment Legislation

David B. Humphrey and Robert Hunt

Journal of Money, Credit and Banking, 2013, vol. 45, issue 7, 1415-1429

Abstract: Electronic payment legislation permitted an initially paper substitute digital image of a check, and later the electronic digital image of a check, to be processed and presented for payment on a same‐day basis. By shifting to electronic collection and presentment, Federal Reserve per item check processing costs fell by over 70%, reducing estimated overall U.S. payment system costs by $1.16 billion in 2010. Payment collection times and associated float fell dramatically for collecting banks and payees with consequent additional savings in firm working capital costs of perhaps $1.37 billion and indebted consumer benefits of $0.64 billion.

Date: 2013
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https://doi.org/10.1111/jmcb.12057

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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:45:y:2013:i:7:p:1415-1429

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