Deluxe Corp.'s chief executive told a gathering of Wall Street analysts in New York last week that he expects the number of checks written in the United States to begin declining as early as next year.
J.A. "Gus" Blanchard, president and CEO of the St. Paul-based check printer - the nation's largest - said consumers' increased use of credit and debit cards, along with nascent home banking services are beginning to impact the use of paper checks.
"Technological changes are moving payments away from cash and checks," said Mr. Blanchard, a former AT&T executive who joined the company last year to help improve flagging profitability in its core business. "I expect the number of checks to begin to decline by 1997 or 1998."
In anticipation of such a trend, Deluxe announced last month it would close 26 of its 41 check printing facilities around the country. Mr. Blanchard noted that the plant consolidation, along with efforts to bundle related technology services, such as providing banks with checking account authorization data, "should help us improve our margins and even increase market share in the check printing business."
He added that Deluxe is looking to expand its transaction processing and software businesses, now handled mainly through its Deluxe Data subsidiary, a major processor of automated teller machine transactions.
"Our delivery capabilities - today concentrated in debit-related areas - can and are being enhanced to provide home banking, enhanced ATM processing, call center management, and (networking) software," Mr. Blanchard said. "Also under investigation are possibilities for us in the smart card, voice response, and Internet access areas, to name a few."
In the home banking arena, Mr. Blanchard said that Deluxe has already forged an alliance with Microsoft Corp. to provide "neutral, unbranded" home banking systems to European banks.
"We are now working closely with Microsoft and wil be announcing a number of product offerings during the early part of 1996," Mr. Blanchard said. He added that Deluxe's alliance with the PC software behemoth is currently focused only on the European market.
Mr. Blanchard also noted Deluxe is reevaluating its future role in the processing of bank card transactions for merchants. A year ago, Deluxe acquired Financial Alliance, a merchant processing firm.
"We're looking at Financial Alliance to see if it fits into our new strategy," Mr. Blanchard said, noting that the unit has only 1% of the merchant processing business in the United States, while its top competitor, First Data Corp., has a market share in excess of 30%.