Checks remain a popular way to paySTACEY PLAISANCE / L’Observateur / March 10, 1999Checks were supposed to become a thing of the past with the development of automatic electronic deposit and withdrawal systems, but that hasn’t happened.

Published 12:00 am Wednesday, March 10, 1999

A recent Federal Reserve report shows an estimated 65 billion checks will be written this year, which is double the number from 20 years ago. Areabank employees say people just don’t want to give up control over the timing and amount of their financial transactions, and some customers find little comfort with making electronic withdrawal payments.

Method of payment depends on the individual, but most are reluctant to give up control over the timing of their bill payments, said Nolan Falgougt, chief financial officer of First National Bank in Vacherie.

Automatic check cards have been a convenient way for bank customers to access their checking accounts without writing a check, and Falgougt said the cards are becoming popular for making some transactions, but not for all.

Check cards are becoming more widely used for certain payments such as shopping expenses and loan debts, but most people still prefer to pay off their monthly bills directly, Falgougt said.

“If people can control when the money will be withdrawn and for how much, they are more accepting of making electronic payments,” he said.

“People like to use check cards for shopping, withdrawing money and even paying off some bills like loans.”Falgougt said people are aware of electronic transaction systems, but control is the key factor to whether customers will utilize the automatic systems.

With bank loan payments, Falgougt said public awareness regarding automatic withdrawals is increasing because the payments are deducted in an established amount at a set time each month, and people feel more confident with that.

“If people know when the money is coming out and how much, they are more accepting, but when they lose direct control of the transaction, they aren’t as willing to accept the electronic system,” Falgougt explained.

He said that because many utility services do not make bill deductions in the same amount on a set date each month, customers refrain from using electronic payment services for utility bill withdrawals.

“Some utility services agree to payment preferences, but some don’t,” Falgougt said. “If companies give customers the opportunity to select adate, they will probably be more willing to use automatic payments.”Bill Beacom, senior vice-president of Union Planter’s retail lending department, said Automatic Clearing House transactions are becoming more widely used in paying off bank loans, and the electronic payment method is often more cost-effective for both the bank and its customers.

The cost to process a loan payment electronically is significantly less than manual processing methods such as the mail or teller services, Beacom said. And many banks give a cheaper interest rate to customerswho use an ACH payment on a bank loan, he added.

Beacom said that the number of customers still writing checks to pay off loans is still remarkably high, but people are becoming more aware and comfortable with automatic payments.

“It’s becoming more accepted because it’s a set payment at a set time,” Beacom said. More than three percent of new bank loan customers opt toutilize the ACH payment system available through Union Planters, he said.

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