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Citi eliminates paper checks for some as mobile banking grows

Mobile banking has made it easier than ever for consumers to pay bills, which is reflected in the findings from a new Citibank survey revealing that 20 percent of younger consumers do not own a checkbook. The new Access Account is designed for digitally savvy consumers by excluding paper checks in favor of online and mobile payment methods.

“We developed Access after spending a lot of time listening to customers and looking at their banking needs, and we identified several trends,” said Robert Beck, chief operating officer of retail banking at Citi U.S.

“One of the major ones relates to the fact that the ongoing rise in digital banking is changing how people pay bills and use accounts,” he said. “A recent Citi survey found that more people now pay monthly bills with online or mobile than with paper checks, and more than half of consumers avoid writing paper checks whenever they can.”

Paper checks 
Citibank reports that many of its customers, particularly those active with its online or mobile banking options, no longer have a need for paper checks.

The recent survey of consumers found that 38 percent of United States consumers pay monthly bills through digital channels, a number that continues to grow and now outpaces paper checks, which are used by 32 percent of consumers.

Additional findings include that 53 percent of consumers avoid writing paper checks whenever they can and 12 percent do not own a checkbook at all.

The numbers are higher among lower-income and younger consumers, with 21 percent of those earning less than $30,000 per year not owning a checkbook while 20 percent of consumers younger than 40 do not have a checkbook.

The survey also shows that if faced with choosing a single method of payment, only 6 percent would choose paper checks.

Mobile bill payments
Access Account compensates for the lack of paper checks by enabling account holders to manage their finances using Citibank’s digital platforms, including a range of smartphone and tablet applications as well as mobile Web options. These can be used to view balances, monitor account activity, transfer funds and pay bills.

Customers can also enroll in e-statements and banking alerts.

Account Access customers can also access their accounts at all Citibank branches and ATMs.

In addition to eliminating paper checks, the Access Account does away with overdraft fees and has no or low monthly charges as another way to address the banking needs of lower income and younger consumers.

The survey shows that 25 percent of consumers say the ability to overdraw their account and be charged a fee for doing so could get them in financial trouble. For those with incomes of less than $30,000, the number rises to 31 percent, and for those under age 30, it is 37 percent.

Customers can waive the $10 maintenance fee by having one qualifying bill payment in a statement period or one qualifying direct deposit or by maintaining an average monthly balance of $1,500 or more.

“Access caters to these active digital consumers who utilize online and mobile payment systems and forgo the use of traditional paper checks,” Mr. Beck said.

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York