Use of checks and DOC decreases, but has a captive audience – 06/18/2023 – Market

Checks and transfers via DOC (Credit Order Document) may no longer be part of the lives of many Brazilians —there are young people who don’t even know what they represent—, but the two means of payment still have a captive audience.

According to the Central Bank, 12.2 million checks were cleared in April this year alone. DOC was used 2.4 million times in the same month.

In 2022, 202.8 million checks were cleared, which consolidates a downward trend over the years. Compared to 2021, when compensation totaled 317 million, there was a 36% reduction.

In 1995, the beginning of the BC’s historical series, 3.3 billion checks were cleared.

In the case of the use of DOC/TED (Available Electronic Transfer) in 2022, there were 65 million operations, a number 42% lower than that registered in the previous year.

DOC was created longer and has more limitations. The maximum transfer volume is BRL 4,999.99 and it takes one day to reach the destination account. TED, on the other hand, allows higher values ​​and falls on the same day if done before 5 pm. The two modalities can be used at the checkout counter or in bank applications.

In financial volumes transacted, the reduction does not occur on the same scale. In the case of checks, the reduction in the amount was 4% between 2021 and 2022, while in the use of DOC/TEDs there was a more relevant drop, of 26.5%.

In both cases, despite fewer transfers being made, the average transaction value grew. This is due, in part, to a fear that a portion of the population still has in making large-value transfers with Pix, according to experts consulted by the report.

When carrying out these operations, supporters give up the instantaneousness of the Pix to use a DOC, which takes a day to arrive, or a check, which needs to be physically taken to the bank or terminal to be cleared and runs the risk of not being accepted by signature discrepancy.

It seems like a lot, but by way of comparison, it is worth noting that Pix, in first place, was used 2.9 billion times in April. A distant second is boleto, used 326.3 million times.

Even with Pix largely dominating the scene, the check finds its place in some audiences and some specific transactions.

Merula Borges, a finance specialist at the CNDL (National Confederation of Shopkeepers), points out that a survey by the entity indicated that the profile of the main users of checks are women from class A and B between 18 and 34 years old.

“The survey did not indicate what they spend, but I have a hunch because I have experience with it. The last few times I used it was to pay for medical treatment. He charged the same amount in cash when paying in installments with a check,” he said.

This is the main use that Pedro Eduardo Batista, owner of an English course franchise in Brasilia, observes. Some of its customers, mostly older, use this method to pay in installments.

“Despite the risk, sometimes it is advantageous to pay in installments by check, but it really is a minority nowadays”, he said. He has been a partner in the business for over ten years and has noticed the change in the payment method over time.

“Before, payment by check was much more common, but over time, and especially with Pix, it disappeared”, he analyzed.

The possibility of paying for a purchase in installments without using a credit card was also pointed out by professor of Production engineering at the University of Brasília, Ricardo Paixão.

“Some types of contract favor checks, some niches. Gyms and similar things prioritize checks because they want to retain the customer in a long plan and checks are cheaper than credit cards. With checks you can pay in 24 installments, with cards it’s much less “, he said.

This possibility of paying in installments with a check is also interesting for those who, for some reason, cannot access their credit card.

This is the case of the executive of a company undergoing judicial reorganization who spoke to the reporter on condition of anonymity.

Due to the company’s situation, it cannot get credit, which is a problem because it needs to pay in installments to adjust the outflow of resources to the cash flow. The solution is to use the check, which ends up working as a promissory note.

Paixão points out that there is also a residual use in using checks: older people who do not want to use more recent modes of transfer. “This will always exist in any type of technology, but it does not explain the millions of transactions that have a month,” she said.

The DOC, on the other hand, is so little used that it will no longer be offered by the institutions that make up Febraban (Brazilian Federation of Banks) from February of next year, after almost 40 years in operation.

But who will stay in hand with this decision? Paixão points out that the modality is still used in old company payment systems.

As the system was made a long time ago, DOC was the most modern option. Other options arose, but remodeling the technology was a lot of work and it stayed that way — this type of situation is more common than you think; until 2020, for example, the NHS, the British SUS, was one of the biggest buyers of fax machines in the world.

Competition between means of payment remains fierce and, for Paixão, another old acquaintance of Brazilians, the boleto, has its days numbered.

“I believe that with the direction that BC is giving, Pix should take the place of TED and eventually of boleto in the near future”, projected.

This will happen, believes Paixão, with Pix leaving bank apps and moving on to other means.

“In addition to WhatsApp, there are other heavyweights accrediting themselves in this, such as Google. It is feasible in a futurology exercise to imagine that in the near future Pix will become increasingly convenient and, in something like five years, replace the boleto and TED “, evaluated.