But even with consumer confidence in Internet security on the rise, nothing has stemmed the flood of paper issuing from America's checkbooks. But what we've realized is that it is a complex problem, and it's going to take a whole new industry to solve it. We're not even in the first inning of the ballgame. The key, according to Ostrow, is the banks. They have the most to gain, after all, since they are typically the ones who must sort and store all those checks, or pay someone else to do it.
Consumer trust is the key to Internet commerce, and consumers already trust their banks.
The banks play an absolutely critical role. Despite obvious incentives, however, the banks haven't responded well to the challenge of electronic checking. More than half of the nation's 35 largest banks don't offer electronic bill payment of any sort. Gerard Milano, executive director of the California Bankers Clearing House Association, said smaller banks and other financial institutions will have to lead the way into an electronic future. After all, with mergers giving large banks a competitive edge in the costs of check-clearing, smaller institutions will have to find some way to even the playing field.