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Are electronic money transfer better than paper checks?

Well, let me ask a couple of other questions.

Is the Pope Catholic?
Do bears do their business in the woods?

The answer to all these questions, of course, is a resounding "Yes"!

To be perfectly honest, cheques (and please accept my apologies for the generally accepted British spelling of these instruments) are an antiquated system of payment that has been in widespread use since the 17th century and which has now been largely subsumed by alternative methods of payment. Electronic money transfers are just one of the replacements. The others include credit cards, third party online payment services (eg. Paypal), payments at postal and other agencies and paying in cash at the third party's own bank. The latter method has gone much the same way as humble cheque, both are financial dinosaurs.

In many western European countries, much of eastern Asia and the Pacific, cheque usage has been in a state of continual decline since at least the 1980s. In parts of northern Europe, cheques are almost non-existent, thanks mostly to interconnected international Giro system that has been in use since about the 1950s. The only large scale users in Europe are the United Kingdom, Ireland and France, where cheques are free to personal customers, however electronic transfers are becoming more common and processing volumes tipped in favour of the latter for the first time in 2006. Many organisations have now either refused to accept cheque payments or are charging for the privilege.

The only large scale users of cheques in the western world are the United States and Canada. It is not because Americans (and Canadians) are old fashioned and set in their ways, but rather because the United States lacks a system for clearing high volumes of low value electronic payments. Strange and something that I consider quite surprising. That this financial epicentre of the western world lacks something as basic as a system to effect these kinds of electronic payments. Why this is the case is probably beyond the scope of this topic however I understand that it has something to do with the regional structure of the US Federal Reserve and the legislation underpinning the banking system as a whole. What was also surprising was that in 2001, some 25 percent of Americans didn't even have a bank account ("The Future of Money" by Organisation of Economic Co-operation and Development, 2002). This means that a huge slice

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