Kansas City, Mo. ? Americans’ growing preference for paying bills via the Internet and shopping with debit cards spells bad news for companies that print checks but good news, at least in the short term, for a printing plant here.

Deluxe Corp., based in Minneapolis and the nation’s leading check printer, announced earlier this month that it was closing a printing plant in Anniston, Ala., that employs more than 200 people.

The company, which saw check sales drop 6.5 percent last year, has recently closed or is in the process of shuttering three other plants, in San Jose, Calif., Pittsburgh and Indianapolis. Business from those plants has been shuffled to other plants, including the one in Kansas City, which employs up to 450 people.

The country’s second-largest printer, Atlanta’s John H. Harland Co., is in the midst of a reorganization of its printed products division after seeing sales dip 5 percent last year. Harland plans to cut its plants from 14 to nine and layoff around 500.

Industry officials say part of the shrinking work force is because of automation and note that the sluggish economy has sapped demand. But they also acknowledge that consumers are increasingly forgetting about checks in favor of other options.

“It’s related to productivity and process improvements as much as it has been to a gradual decrease in check use,” said Stuart Alexander, a spokesman for Deluxe, which still has 10 plants and about 5,400 employees.

Second only to cash

Check writing continues to be second only to cash for paying debts, but a Federal Reserve study estimated that Americans in 2000 wrote 10 billion fewer checks than in 1995, when they wrote about 50 billion checks. The Fed updated its findings late last year, expecting check usage to drop another 5 percent in 2004.

Utilities, credit card companies, mortgage lenders and even the IRS are increasingly recommending people to pay their bills over the Internet, especially as encryption technology has improved security. In a study released in December, the Pew Internet and American Life Project said that 34 million Internet users in 2002 had reported at least trying online banking, up from 15 million two years before.

Debit card dilemma

Shoppers are also increasingly using debit cards at the cash register, to the tune of 495 million transactions a month. Combined with credit cards, card usage recently surpassed checks as a payment method in the marketplace, said David Robertson, publisher of The Nilson Report.

“With greater frequency, people are reaching into their pockets and pulling out the debit card when they’re in the checkout line,” Robertson said. “You’re more likely now to get a dirty look if you try to pay with a check, requiring the cashier to copy down your driver’s license and phone number. Writing a check at the point of sale is now the equivalent of smoking outside of a building.”

But the check has its defenders, who say concerns with security and people’s personal finance habits will keep paper checks a viable option for years if not decades.

“I don’t know how many years that people have been saying checks are going away,” said Wade Delk, executive director of the Check Payment Systems Assn., a Washington, D.C.-based advocate for check printers, suppliers and transportation companies.

Delk said his organization had commissioned studies showing that more than two-thirds of respondents favored paper checks over other methods.

“In the short term, there are many other gadgets,” he said. “At the end of the day, checks still have a higher volume and definitely have a higher volume in terms of amounts paid.”

Stan Hollen, president and CEO of Liberty Enterprises, which provides checks to a majority of the country’s credit unions, said his company actually saw an increase in orders last year.

“We’re gaining market share, particularly in the larger credit union sector,” Hollen said. “That helps us for a period of time.”