Americans embrace debit cards, online transactions

first_img Checks down in favor of plastic In some cases, consumers may still write a check, but increasingly, merchants are scanning those checks and converting them to an electronic payment. The Federal Reserve counts those checks as electronic payments and not as checks; paychecks electronically deposited in employees’ bank accounts are also included as electronic payments. Converting checks to electronic payments allows merchants to get paid quicker, and it may help reduce the number of insufficient-funds checks businesses have to deal with. Processing checks electronically is also cheaper. In 2003, about 8.9billion converted checks were reported, accounting for about 11percent of all noncash payments. At some stores that process checks electronically, such as Wal-Mart and clothing retailers the Gap and Banana Republic, the clerk hands the check back to the consumer with their receipt after scanning it and claiming an electronic payment for the store. Consumers might not realize that many of the checks they write to utilities, mortgage companies and other businesses are also being converted to electronic payments when the companies receive them, said Terri Bradford, a payments researcher with the Federal Reserve Bank of Kansas City. The decline in check writing, combined with the increase in electronic check processing, prompted the Federal Reserve to dramatically reduce the size of its check-processing department, whose operations are covered by the processing fees it charges for handling checks and electronic transfers. Since 2003, the Fed has closed more than half of its 45 check-processing centers. By the end of 2008, only 18 will remain. Checking writing isn’t going away, though. Some transactions are still better suited to checks, such as paying the kid who mows the lawn, making a contribution to a church to have a record of charitable donations at tax time, or payments such as real-estate closings, Bradford said. Demographics also plays a role. Joe Abboud, 90, wrote a check for his groceries at Hy-Vee recently because that’s what he always does. He said he occasionally uses a credit card, but checks are just more comfortable. Another grocery customer, Cheryl Carlson, said she uses checks to keep track of her spending. When she writes a check, she always writes the amount down in her register. With the debit card, that step is easy to forget. “The only time I use my debit card is when I leave the checkbook at home,” said Carlson, who is in her 40s. Fed closes processing centers But paper isn’t going away Suited to checks Some business payments might also be better suited to checks, Bradford said. For example, writing a check instead of authorizing a wire transfer or making some other electronic payment may help a business better manage its cash flow because there is still some delay between when the check is written and when it is received. “From a cash-management purpose, I imagine some businesses would still prefer checks because of the float,” Bradford said. She doesn’t expect checks to entirely vanish. “There’s a certain segment of the population that’s going to write checks,” Bradford said. “You probably get stuck behind them in the check-out aisle.” 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! The growing popularity of plastic is the biggest factor. From 2000 to 2003, the number of debit-card transactions nearly doubled from 8.3billion to 15.6billion, and the number of credit-card transactions jumped from 15.6billion to 19billion. Increasingly, checks also are being converted into electronic payments by merchants who prefer electronic transfers to dealing with the paper checks. For Julie O’Neill of Omaha, her credit card is simply more convenient, and all her spending is compiled on a single statement at the end of the month. When it comes time to pay bills, she turns on her computer rather than digging for stamps. “I procrastinate, so then I can go online and not have to go through snail mail,” she said. Together, credit and debit card use accounted for 43percent of all noncash payments in 2003, up from 33percent in 2000. Richard Kesterson slid his debit card out of his wallet before the grocery store cashier rang up his total. Like millions of Americans, the Omaha, Neb., man didn’t even consider paying by check. Using a debit card or paying online through his bank’s bill-pay system is easier, he said – and his bank keeps track of his spending instead. “I haven’t balanced my account in 10 years,” Kesterson said. Check writing has declined sharply since 1995. The Federal Reserve estimates that 49.5billion checks were paid in the United States in 1995; that figure dropped to 36.6billion checks paid in 2003, according to the most recent Fed studies. last_img read more

Amgen’s earnings slump 82 percent

first_imgPhysician groups are appealing the decision, and Amgen said Wednesday that it was hopeful a compromise can be reached. Amgen has been struggling with the effects of that decision and a patent dispute with Swiss drug company Roche. A jury in Boston on Tuesday found that Roche violated 11 Amgen patents in formulating its own anemia drug, Mircera. Amgen said it would ask the court for an injunction to prevent Roche from selling Mircera in the United States, where it would challenge Aranesp, Amgen’s top-selling drug. Roche said it is considering an appeal. Amgen said Wednesday that its previously announced restructuring plan, which includes a 12percent to 14percent cut in staffing, will result in 2007 restructuring charges of $775million to $850million, up from earlier estimates of $600million to $700million. The company said the additional costs are the result of a decision to postpone the building of a manufacturing plant in Ireland and the closure of a manufacturing facility in Thousand Oaks. Still, the company said it was on track to deliver earnings in the range of $4.13 to $4.23 as previously announced.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! Biotech company Amgen Inc. on Wednesday reported flat revenue and lower profit in the third quarter as the drug maker continued to deal with a blow to its business that had been dealt by federal regulators. The Thousand Oaks-based company reported net income of $201million, or 18 cents per share, for the quarter ended Sept. 30, down 82percent from $1.1billion, or 94cents per share, in the same period last year. This year’s profits were hit by write-offs of nearly $1billion stemming from an acquisition and restructuring costs. Revenue in the quarter was unchanged at $3.61billion. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREGame Center: Chargers at Kansas City Chiefs, Sunday, 10 a.m.Excluding one-time charges and stock options expenses, the company said it would have reported earnings of $1.08 per share, a slight increase over the $1.04 per share in the same period last year. On that basis, analysts surveyed by Thomson Financial had expected per share earnings of $1.03. Worldwide sales of its anemia-treating drug Aranesp decreased 23percent, to $818million, in the third quarter in reaction to the Food and Drug Administration finding the drug should carry a stronger warning label when used by cancer patients with anemia. The warning label addition called for doctors to use the lowest possible dose of the drug. U.S. sales dropped 36 percent, to $460 million. last_img read more