Check transaction volume experienced its steepest drop of the past four years, more than doubling the 2002 rate of decline. The latest government report indicates that check transaction volume declined by 4.7% in 2003 to 39.5 billion checks. In 2002 rate of decline was 1.9%. By contrast, signature debit card transaction volume increased 17% last year, from 10.3 billion to 12.0 billion transactions. In its “90th Annual Report to Congress,” the Federal Reserve System reported that it processed 15.81 billion checks in 2003, compared to 17.0 billion in 2002. The Federal Reserve’s commercial ACH volume increased by 12.1% last year to 5.59 billion payments. Commercial ACH payments include Direct Deposit of payroll, Direct Payment of consumer bills, business-to-business payments, and e-check payments such as online bill payments and accounts receivable check conversion. The unit cost to the Fed to process a check in 2003 increased by 13.3%, from 4.5 cents in 2002 to 5.1 cents in 2003. The Fed’s unit cost to process an ACH payment decreased by 15.4%, from 1.3 cents in 2002 to 1.1 cents in 2003. In 1995, the Fed’s unit costs for checks and ACH payments were virtually identical. In 1995, there was a record 49.5 billion checks written in the USA.