A poll of 3308 US consumers - sponsored by First Data, Harland Clarke, MasterCard, Metavante and Pulse - found electronic payments are now the majority across all three major venues - bill, Internet and in-store.

Until recently bill payments were the last bastion of cash and cheques - with the two forms of payment accounting for 55% of total bill payments in 2005 - but this has slipped to 38% in 2008.

"Bill payment has historically been a stronghold for cheques," says Ajay Nagarkatte, MD of syndicated research at BAI. "But increases in the adoption and usage of online bill payment over the past three years have significantly eroded the number of paper cheques being mailed to pay bills."

PIN and signature debit cards continue to gain in popularity for in-store payments, accounting for 37% of purchases in 2008, compared to 21% in 1999.

In contrast, the use of cheques to pay for in-store purchases has declined from 18% in 1999 to eight per cent in 2008. After holding relatively steady for the past few years, the use of cash has now dropped to 29%.

However, the survey shows that contrary to robust forecasts, gift and pre-paid cards have not seen a significant increase in take up over the last three years.

Chris Allen, director, consulting services, financial services practice, Hitachi Consulting, says: "I expect the shift from paper to electronic payments to continue as consumers increase their use of cards and new forms of electronic payments gain traction."

Earlier this year a US study released by TowerGroup forecasted a continuing decline in cheque volumes - from 22.1 billion items in 2006 to 17.9 billion by the end of 2009 - as consumers turn to electronic payments.

Figures from TowerGroup and the Federal Reserve show that cheques have lost their dominance in the US payments market, shrinking from a 46% share of total non-cash payment volume in 2003 to 31% in 2006.

TowerGroup says this fall has been driven by a desire among consumers to be able to pay bills and make purchases in faster and more convenient ways.