The Depository Institutions Payments Study A Survey of Depository Institutions for the 2004 Federal Reserve Payments Study Research Sponsored by the Federal Reserve System Performed by Global Concepts and the Federal Reserve System Copyright 2004, Federal Reserve System 2004 Depository Institutions Payments Study December 2004 Federal Reserve Project Team Members Geoffrey R. Gerdes Economist, Payment System Studies Section Division of Reserve Bank Operations and Payment Systems Board of Governors of the Federal Reserve System Stephen A. Levy Director, Strategic & Financial Planning Retail Payments Office of the Federal Reserve System Federal Reserve Bank of Atlanta May Liu Statistician, Micro Statistics Section Division of Research and Statistics Board of Governors of the Federal Reserve System Namirembe E. Mukasa Research Assistant, Payment System Studies Section Division of Reserve Bank Operations and Payment Systems Board of Governors of the Federal Reserve System Richard Oliver Senior Vice President and Retail Product Manager Retail Payments Office of the Federal Reserve System Federal Reserve Bank of Atlanta Darrel W. Parke Chief, Micro Statistics Section Division of Research and Statistics Board of Governors of the Federal Reserve System Melinda J. Rushing Assistant Vice President Retail Payments Office of the Federal Reserve System Federal Reserve Bank of Atlanta Jack K. Walton II Assistant Director Division of Reserve Bank Operations and Payment Systems Board of Governors of the Federal Reserve System Consultant Team Members (Depository Institutions Payments Study) David C. Stewart Senior Vice President Global Concepts, Inc., Atlanta, GA © 2004, Federal Reserve System 1 2004 Depository Institutions Payments Study December 2004 Table of Contents 1 INTRODUCTION ............................................................................................... 6 2 METHODOLOGY ................................................................................................ 8 2.1 SAMPLING ..................................................................................................... 8 2.1.1 Sample Design ...................................................................................... 9 2.1.2 Sample Frame ....................................................................................... 9 2.1.3 Sample Size and Allocation.................................................................... 10 2.1.4 High-Priority Respondents ..................................................................... 10 2.2 ESTIMATION (AND IMPUTATION) ......................................................................... 12 2.3 REFERENCE PERIOD ........................................................................................ 14 2.4 THE SURVEY INSTRUMENT ................................................................................ 14 2.5 SURVEY RECRUITMENT AND PARTICIPATION ............................................................ 16 2.5.1 Contact List Development and Recruitment.............................................. 16 2.5.2 Registration ........................................................................................ 16 2.5.3 Survey Response ................................................................................. 17 2.6 DATA COLLECTION AND DATA MANAGEMENT ........................................................... 18 2.7 DATA EDITING.............................................................................................. 19 2.7.1 Outlier Identification............................................................................. 19 2.7.2 Tracking Outliers and Revisions.............................................................. 20 3 SURVEY RESULTS AND NATIONAL ESTIMATES ............................................... 20 3.1 ESTIMATES FROM MULTIPLE SOURCES................................................................... 20 3.2 CHECK PAYMENTS .......................................................................................... 21 3.2.1 The Decline in Check Payments.............................................................. 22 3.2.2 “On-Us” Paid Checks ............................................................................ 24 3.2.3 The Decline in “On-Us” Checks............................................................... 25 3.2.4 Checks Returned.................................................................................. 25 3.2.5 Changes in Returned Check Volumes ...................................................... 26 3.2.6 “On-Us” Returned Checks...................................................................... 27 3.2.7 Revision to Previous Check Payments Estimates ....................................... 28 3.3 ACH ......................................................................................................... 28 3.3.1 Total ACH Payments............................................................................. 29 3.3.2 ACH Credits and Debits......................................................................... 30 3.3.3 “On-Us” ACH Payments......................................................................... 33 3.3.4 Network ACH Payments ........................................................................ 34 © 2004, Federal Reserve System 2 2004 Depository Institutions Payments Study December 2004 3.4 DEBIT CARD ................................................................................................ 36 3.5 ATM ......................................................................................................... 38 3.5.1 Total ATM Withdrawals ......................................................................... 38 3.5.2 “On-Us” and Foreign ATM Withdrawals .................................................... 39 3.6 DISTRIBUTION OF DEBITS TO DEPOSIT ACCOUNTS BY TRANSACTION TYPE ......................... 41 3.7 DDA TRANSACTION MIX BY TYPE OF DEPOSITORY INSTITUTION..................................... 41 APPENDIX A: SURVEY INSTRUMENT (LONG FORM) ............................................. 43 APPENDIX B: SURVEY INSTRUMENT (SHORT FORM) ........................................... 43 APPENDIX C: REGISTRATION FORM .................................................................... 43 © 2004, Federal Reserve System 3 2004 Depository Institutions Payments Study December 2004 Table of Exhibits EXHIBIT 1: SNAPSHOT OF STUDIES (2004 AND 2001)........................................................................................7 EXHIBIT 2: ORIGINAL SAMPLE FRAME DETAIL ......................................................................................................11 EXHIBIT 3: FINAL SAMPLE FRAME DETAIL .............................................................................................................13 EXHIBIT 4: DISTRIBUTION OF REGISTRATIONS BY MODE ....................................................................................17 EXHIBIT 5: RESPONSE RATE PER STRATUM ...........................................................................................................18 EXHIBIT 6: NUMBER OF CHECKS PAID IN 2003 ...................................................................................................21 EXHIBIT 7: VALUE OF CHECKS PAID IN 2003.......................................................................................................22 EXHIBIT 8: AVERAGE VALUE OF CHECKS PAID IN 2003......................................................................................22 EXHIBIT 9: NUMBER, VALUE AND AVERAGE VALUE OF CHECKS PAID IN 2000 AND 2003 .............................23 EXHIBIT 10: NUMBER OF "ON-US" CHECKS PAID IN 2003................................................................................24 EXHIBIT 11: ESTIMATED ANNUAL "ON-US" CHECKS VALUE IN 2003...............................................................24 EXHIBIT 12: AVERAGE VALUE OF “ON-US” CHECKS IN 2003............................................................................24 EXHIBIT 13: NUMBER, VALUE AND AVERAGE VALUE OF ON-US CHECKS IN 2000 AND 2003........................25 EXHIBIT 14: NUMBER OF CHECKS RETURNED UNPAID IN 2003.........................................................................26 EXHIBIT 15: VALUE OF CHECKS RETURNED UNPAID IN 2003 ............................................................................26 EXHIBIT 16: AVERAGE VALUE OF CHECKS RETURNED UNPAID IN 2003 ...........................................................26 EXHIBIT 17: NUMBER, VALUE AND AVERAGE VALUE OF CHECKS RETURNS IN 2000 AND 2003 ...................27 EXHIBIT 18: NUMBER OF "ON-US" CHECKS RETURNED UNPAID IN 2003........................................................27 EXHIBIT 19: VALUE OF "ON-US" CHECKS RETURNED UNPAID IN 2003...........................................................27 EXHIBIT 20: AVERAGE VALUE OF "ON-US" CHECKS RETURNED UNPAID IN 2003 ..........................................28 EXHIBIT 21: REVISIONS TO ESTIMATED 2000 CHECK TOTALS ..........................................................................28 EXHIBIT 22: NUMBER OF ACH PAYMENTS IN 2003.............................................................................................29 EXHIBIT 23: VALUE OF ACH PAYMENTS IN 2003 ................................................................................................30 EXHIBIT 24: AVERAGE VALUE OF ACH PAYMENTS IN 2003 ...............................................................................30 EXHIBIT 25: NUMBER OF ACH CREDITS IN 2003 ...............................................................................................31