electronic means of making payments without incurring the additional debt often associated with credit card use. in fact, on at least one major network, debit card payments are reported to have surpassed credit card payments. this shift in payment behavior can be attributed in part to changes in the rules and regulations governing the ach network, which have facilitated the use of this network for one - time, nonrecurring payments. as you know, in the past the ach was used mainly for recurring payments, such as payroll and mortgage payments. today, consumer purchases at stores, over the telephone, and on the internet can be completed using the ach. regulatory and rule changes have also facilitated the use of the ach to convert checks that consumers mail to businesses or provide at the point of sale into electronic payments. these new uses of the ach for one - time payments have driven the continuing double - digit growth rates of ach transaction volume. given these dynamic changes in the payments system, the federal reserve is planning to repeat its triennial survey of retail payments use next year to take another snapshot of the nation ’ s retail payments system. helena l. tenenholtz and jeffrey s. h. yeganeh, of the board ’ s staff, contributed to this speech. the federal reserve ’ s experience with check 21 not only are more payments being made electronically, but more check payments are also being processed electronically, in part because of the check clearing for the 21st century act, or check 21. 2 clearly, check 21 has begun to diminish the importance of geography and physical transportation in check processing, and banks have started to reengineer their backroom processes to accommodate end - to - end electronic check clearing. since october 28, 2004, the date check 21 took effect, the reserve banks ’ check 21 volume has grown rapidly, reflecting a trend that will lead to the widespread electronic processing of checks in the not - too - distant future. private - sector service providers that offer check 21 services are also experiencing rapid growth in volume as the banking industry becomes more interested in and capable of using check 21 authority to clear checks. today, about 17 percent of the checks deposited with the federal reserve banks, or slightly over 6 million checks a day valued at about $ 20 billion, are deposited using the reserve banks ’ check 21 product suite. as expected, depository institutions have been somewhat slower in agreeing to accept their check presentments electronically because of the complexity of integrating such

sale will not be completed unless the stored value is adequate to make the purchase and the amount of the stored value can be determined immediately. compared with cash, there is less risk of theft, at least out of the traditional cash register. while merchants have not eagerly invested in the infrastructure because of the network problems mentioned above, in the long run there should be some gains to them from electronic money technology. for financial institutions, stored - value products may offer new opportunities for delivering banking services and improving security through computer chips. consumers may switch from using cash to using deposits that are linked to stored - value products, say with automatic loading from an atm machine or with links to a personal computer. this could be a profitable new market for financial institutions with relatively little risk. while financial institutions have not been early to climb aboard the electronic money bandwagon either, they may become strong supporters at some point. if financial institutions issue the stored - value cards, there is some protection against abuses because financial institutions are already regulated, particularly with respect to their solvency. regulations could also encompass the institutions ’ disclosure policy, its privacy policy and its following of other proper procedures. many institutions are now announcing very strict disclosure and privacy policies and extending these policies to stored - value products should be straightforward. in one early indication of coming complications, the federal deposit insurance corporation ( fdic ) has ruled that electronic money accounts issued by insured institutions are not always legally defined as deposits under the deposit insurance act. this means that stored - value balances do not always carry deposit insurance. by contrast, in virtually all european countries, some of which seem to have more rapid growth of electronic money products, stored - value balances are typically accorded the same protection as deposits issued by a bank. at this point it is unclear whether the negative fdic decision could be a major reason for the sluggish growth of stored - value products in this country. in a statistical sense, risk of loss of value through financial insolvency is minor and is probably much less of a factor to consumers than risk of loss of the card or risk that merchants will not accept the card. finally, governmental institutions could have a stake in stored - value technology. the debt collection improvement act of 1996 encourages the federal government to make most of its payments electronically. when consumers do not have bank accounts, as about 10 % now do not, governments have at this point made most payments through debit cards. but at some point, stored - value