Check 21 Savings Over $3 Billion

According to a 2012 working paper published by the Federal Reserve Bank of Philadelphia titled "Getting Rid of Paper: Savings from Check 21", Check 21 is estimated to have saved the US payments system $3.17 billion in 2010. This is because the legislation reduced the float in the payment system and the cost of check payment inefficiencies.

By shifting to electronic collection and presentment, the Federal Reserve reduced its per item check processing costs by over 70%, reducing estimated overall payment system costs by $1.16 billion in 2010. In addition, payment collection times and associated float fell dramatically for collecting banks and payees with consequent additional savings in firm working capital costs of perhaps $1.37 billion and consumer benefits of $0.64 billion.

A 2008 study by the Government Accountability Office (GAO) concluded that Check 21 legislation "...has not yet resulted in overall gains in economic efficiency... but... officials expect efficiencies in the future." Two limitations of the GAO study contributed to the conclusion that Check 21 did not reduce payment costs. First, the GAO focused on the unit cost of paper checks and Check 21 items together rather than separately. Second, at that time Check 21 had been in operation a relatively short period of time.

The new study looked at paper and Check 21 items separately and included data through 2010. By then, just six years after Check 21 took effect, virtually all check volume had been converted to image clearing.