Concerns Over Ending U.S. Paper Checks

Editor's Note:Jennifer Tescher is the founder and CEO of the Financial Health Network, an organization dedicated to driving a cross-industry movement to improve financial health for all in an equitable manner.

Imagine relying on a check from the federal government every month—perhaps Social Security benefits or veterans' compensation—and then one day, it suddenly stops arriving.

Formore than 5 million Americans, that day could begin on October 1st.

On August 14th, the U.S. Treasury Department announced thatit will stop issuing paper checks on September 30th, converting nearly all federal payments to electronic transfers. This move is part of the U.S. government's modernization efforts, aimed at replacing the "outdated paper payment system, which brings unnecessary costs, delays, and security risks”。

In theory, this move is in the right direction: checks are costly, inefficient, and insecure. Check fraud related to mail theft is on the rise in the U.S.,with fraud reports nearly doubling between 2021 and 2023. Checks often takeseveral days to clear. For unbanked consumers,check-cashing services can charge fees of up to 12%—which is even higher than the cost of opening an account and receiving direct deposits. Globally, the U.S. lags behind countries like Australia, New Zealand, Finland, and Poland, where paper checks have almost completely disappeared.

The real question is not whether the government should stop issuing paper checks—buthowto stop. Rolling out such a massive change with only six weeks' notice risks leaving those who depend most on these payments in a difficult position.

Currently,more than 500,000 Americans still receive Social Security benefits via paper checks. For many beneficiaries, these checks are a financial lifeline:40% of seniors rely entirely on this income to cover living expenses. Beyond Social Security,5 million Americans received tax refunds via paper checks in 2025, and this option will also end with this hasty phase-out plan.

If electronic payments represent the future, why haven't these households made the switch yet? Although pandemic stimulus checks prompted many consumers to open bank accounts and set up direct deposit, the remaining "last mile" households are likely the hardest to reach and serve.

The U.S. currentlyhas 5.6 million unbanked households, who tend to have very low incomes and be older—which also means they are more likely to receive federal benefits.

Even among beneficiaries with bank accounts, factors such as age, physical ability, and geographic location can make navigating electronic payments extremely difficult.Nearly 30% of U.S. bank customers aged 70 and older do not regularly use online services, and another15 million Americans live in broadband deserts, where digital banking services are not viable. Without a well-thought-out transition plan, the end of paper checks could cause real financial harm to those who depend on these payments.

There is still time to correct course. The U.S. government should consider supporting citizens through the transition by:

• Conducting broader public awareness campaigns.While the federal government is working withbanks like JPMorgan Chaseto spread information, communication must be multi-channel, sustained, and accessible. Community nonprofits, state and local governments, housing providers, and other trusted institutions should work together to help people understand these changes, transition smoothly, and guard against scams during this critical time.
• Extending the transition timeline.Tax reformand other policy changes affecting consumers typically take months or even years to phase in. Implementing this change hastily could cause chaos.
• Providing broader exemption provisions.Instead of shifting the burden of applying for exemptions onto vulnerable beneficiaries, the government should consider reasonable exceptions (for example, not requiring beneficiaries over 90 years old to make the switch).

The federal government is right: payment methods must move into the future. But that future must be designed with inclusivity at its core. In this race to end paper checks, we cannot leave America's most vulnerable populations behind.