The Role of Automated Funds Transfer Payments in Canada's Declining Use of Cheques

This paper investigates the impact that the emergence of Automated Funds Transfer (AFT) payments has had on cheque use in Canada. We find that AFT payments have played a role in the declining use of cheques during the past decade. Nevertheless the use of cheques remains moderately high in Canada compared to other G7 countries. We follow this result with a discussion on factors contributing to short and long run growth. In the short-term AFT growth is anticipated to continue as more entities shift from paper to electronic payments. In the longer term AFT growth will depend on how AFT meets the needs of small and medium-sized business.