OMAHA, Neb. — Richard Kesterson slid his debit card out of his wallet before the grocery store cashier rang up his total.

Like millions of Americans, he didn't even consider paying by check. Using a debit card or paying online through his bank's bill-pay system is easier, he said — and his bank keeps track of his spending instead.

"I haven't balanced my account in 10 years," Kesterson said.

Check writing has declined sharply since 1995. The Federal Reserve estimates that 49.5 billion checks were paid in the United States in 1995; that figure dropped to 36.6 billion checks paid in 2003, according to the most recent Fed studies.

The growing popularity of plastic is the biggest factor. Between 2000 and 2003, the number of debit card transactions nearly doubled from 8.3 billion to 15.6 billion, and the number of credit card transactions jumped from 15.6 billion to 19 billion.

Increasingly, checks also are being converted into electronic payments by merchants who prefer electronic transfers to dealing with the paper checks.

For Julie O'Neill of Omaha, her credit card is simply more convenient, and all her spending is compiled on a single statement at the end of the month. When it comes time to pay bills, she turns on her computer rather than digging for stamps.

"I procrastinate, so then I can go online and not have to go through snail mail," she said.

Together, credit and debit card use accounted for 43 percent of all noncash payments in 2003, up from 33 percent in 2000.

In some cases, consumers may still write a check, but increasingly, merchants are scanning those checks and converting them to an electronic payment. The Federal Reserve counts those checks as electronic payments and not as checks; paychecks electronically deposited in employees' bank accounts are also included as electronic payments.

Converting checks to electronic payments allows merchants to get paid quicker, and it may help reduce the number of insufficient funds checks businesses have to deal with. Processing checks electronically is also cheaper. In 2003, about 8.9 billion converted checks were reported, accounting for about 11 percent of all noncash payments.

At some stores that process checks electronically, such as Wal-Mart and clothing retailers the Gap and Banana Republic, the clerk hands the check back to the consumer with their receipt after scanning it and claiming an electronic payment for the store.

Consumers may not realize that many of the checks they write to utilities, mortgage companies and other businesses are also being converted to electronic payments when the companies receive them, said Terri Bradford, a payments researcher with the Federal Reserve Bank of Kansas City.

CHECK CENTERS CLOSING

The decline in check writing, combined with the increase in electronic check processing, prompted the Federal Reserve to dramatically reduce the size of its check-processing department, whose operations are covered by the processing fees it charges for handling checks and electronic transfers. Since 2003, the Fed has closed more than half of its 45 check processing centers. By the end of 2008, only 18 will remain.

Checking writing isn't going away, though.

Some transactions are still better suited to checks, such as paying the kid who mows the lawn, making a contribution to a church to have a record of charitable donations at tax time, or payments such as real estate closings, Bradford said.

GOOD OL' PEN AND PAPER

Demographics also plays a role. Joe Abboud, 90, wrote a check for his groceries at Hy-Vee recently because that's what he always does. He said he occasionally uses a credit card, but checks are just more comfortable.

Another grocery customer, Cheryl Carlson, said she uses checks to keep track of her spending. When she writes a check, she always writes the amount down in her register. With the debit card, that step is easy to forget.

"The only time I use my debit card is when I leave the checkbook at home," said Carlson, who is in her 40s.

Some business payments might also be better suited to checks, Bradford said. For example, writing a check instead of authorizing a wire transfer or making some other electronic payment may help a business better manage its cash flow because there is still some delay between when the check is written and when it is received.

"From a cash management purpose, I imagine some businesses would still prefer checks because of the float," Bradford said.

She doesn't expect checks to entirely vanish.

"There's a certain segment of the population that's going to write checks," Bradford said. "You probably get stuck behind them in the check-out aisle."