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    This individual Report Evolving US Payment Systems and Bank Delivery Channels: Death of the Teller...Again? Part II: Payment Trends Driving Bank Delivery Channel Change is available for purchase. This Report is available to members of Mercator Advisory Group’s Customer Interaction Advisory Service. Please be advised that this Report is normally part of a research and advisory service that provides ongoing support throughout the year. As such, this Report contains significant depth of content that is selected for its strategic importance to our members. (For a description of these services, see our Advisory Services section).

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Evolving US Payment Systems and Bank Delivery Channels: Death of the Teller...Again? Part II: Payment Trends Driving Bank Delivery Channel Change

Evolving US Payment Systems and Bank Delivery Channels: Death of the Teller...Again? (Part II)

Two part series Examines Evolving Consumer Payments
and the Impact on Bank Delivery Channels

Boston, MA -- Jan. 27, 2010 - In a two part series Evolving US Payment Systems and Bank Delivery Channels: Death of the Teller... Again? - Mercator Advisory Group's Bob Landry, vice president, Banking Group Advisory Services provides a comprehensive overview of the growth and trends over almost three decades detailing the various market drivers impacting consumer payment products and bank delivery channels.

The research series evaluates how major shifts in consumer payments have reordered the structure and roles of bank delivery channels. Within the series Mercator Advisory Group projects the impact of payment trends on consumer payment transaction and dollar volume and models delivery channel capacity to predict how channels will change from 2010 out to 2015.

Highlights of the series include:

The move toward electronic based payments will continued unabated and will constitute 68% of consumer payments by dollar volume in 2012 and almost 75% by 2017. Checks are the big loser while cards will become the leading form of non-cash payment in 2012.

Branches will be the focal point for significant change as check related transaction volume slows and sales and service capacity is expanded to meet the needs of retiring baby boomers and cement relationships with profitable customers.

Online banking will show strong growth and matures into the primary customer interaction channel. Mobile banking will grow at over 50% CAGR as smart phone adoption accelerates and security concerns are addressed.

Cash usage is holding steady as a result of the recession but the convenience of card payments and the increasing acceptance of cards for low dollar amounts will result in a slow decline.

Contact center agent capacity will increase to support front line sales and service as well as support other channels including chat and email for online banking and provide product expertise to branches and online banking using teleconference and video collaboration.
"Although cash and checks remain widely used in the US, other forms of payment continue to gain market share, with businesses and consumers adopting more convenient and potentially less costly electronic-based payment products. The movement from paper based payments to electronics accelerated over the past decade resulting in a dramatic reversal of roles. Cash and checks fell off their perch tumbling from 60% of dollar volume in 2002 to a projected 32% in 2012 while electronic payments zoomed by them to capture 68% of dollar volume. With this dramatic swing in volume you would expect the transaction capacity of the primary bank channels supporting checks and cash to decline." Bob Landry, vice president, Banking Group Advisory Services comments. "But banks added almost 17,000 branches and 74,000 additional ATMs and cash dispensers were deployed - a 17% increase in delivery capacity since 2002. And banks plan to add more. Are we over branched? Can we encourage our customers to use electronic channels and reduce the number of branches and ATMs? How do we balance cost reduction with customer experience quality and satisfaction? This report addresses these questions from a fresh perspective, provides alternative solutions and offers an integrated multi-channel approach to a key strategic issue."

The first report in the series Payment Trends Driving Bank Delivery Channel Change tracks the development of consumer payment products, identifies growth trends, estimates future volume and transaction growth to 2017 and identifies how bank delivery channels support payment transaction execution, sales and customer support.

The second report in the series, Bank Delivery Channels Evolve to Support Electronic Payments provides an analysis of how delivery channels have evolved, defines their role in consumer payments, estimates present and future channel capacity, and evaluates how each channel's capabilities and capacity will change by 2015 in response to payment changes.

One of the exhibits included in the Bank Delivery Channels Evolve to Support Electronic Payments report:

Payment Trends Driving Bank Delivery Channel Change report contains 36 pages and 19 exhibits.

Bank Delivery Channels Evolve to Support Electronic Payments contains 42 pages and 20 exhibits.

Companies covered in this series include:
Western Union, PayPal, Wal-Mart, Diners Club, MasterCard, Visa, American Express, Discover, Blockbuster, SunTrust, Wells Fargo, Wachovia, AOL, Apple Inc., Commerce Bankcorp, TD Bank, Bank of America, Merrill Lynch, Prudential Securities, Edward Jones Investments, USAA, Umpqua, WAMU/JP Morgan Chase, Barclays and Smarty Pig.

Members of Mercator Advisory Group have access to these reports as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits. Please visit us online at

For more information, please call Mercator Advisory Group's main line: 781-419-1700 or send email to

About Mercator Advisory Group
Mercator Advisory Group is the leading, independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest banks, payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors.