(Region) – The global banking industry will spend US$12.8 billion this year on payments technology, growing to US$14.3 billion by 2005, according to US research.Most of this current spend (US$9.2 billion) is going on electronic payment processing, way beyond the amount ($1.6 billion) spent processing paper, according to US analyst firm, TowerGroup, although fully 71 percent of this expenditure is in North America, where banks will spend US$1.1 billion this year, reflecting continuing US infatuation with the paper cheque.
The share held of payments by electronic transactions in the US economy is forecast to increase with the implementation of new operating rules from NACHA come 2003, changing the paper cheque from a formal legal document into a written payment instruction. NACHA’s new rules for Accounts Receivable Conversion will enable billers such as telephone, electric and gas utilities to truncate checks at the lockbox, scan a cheque, transmit the image and then destroy the original.
Some 15-20 billion cheques are still currently sent to lockbox processors in the US.