{"id":328304,"date":"2025-12-06T02:53:14","date_gmt":"2025-12-06T02:53:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/328304\/"},"modified":"2025-12-06T02:53:14","modified_gmt":"2025-12-06T02:53:14","slug":"could-paper-checks-be-on-the-way-out-like-the-penny","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/328304\/","title":{"rendered":"Could paper checks be on the way out, like the penny?"},"content":{"rendered":"

\n First the penny. Next, paper checks?\n <\/p>\n

\n When the US Mint stopped making pennies<\/a> last month for the first time in 238 years, it drew a lot of attention. But there have been quiet moves to stop using paper checks as well.\n <\/p>\n

\n The government stopped sending out<\/a> most paper checks to recipients as of the end of September, part of an effort to fully modernize federal benefits payments. And on Thursday the Federal Reserve put out a notice that suggested it is considering \u2013 but only considering \u2013 the \u201cwinding down\u201d of checking services it now provides for banks.\n <\/p>\n

\n The central bank\u2019s statement said that as an alternative to winding down those services, it is mulling more investment in its check processing services, but noted that would come at a higher cost. But it is also considering not making any such investments, in order to keep costs roughly unchanged. That would lead to reduced reliability of those services going forward.\n <\/p>\n

\n \u201cOver time, check use has steadily declined, digital payment methods have grown in availability and use, and check fraud has risen,\u201d said the notice from the Fed. \u201cAlso, the Reserve Banks will need to make substantial investments in their check infrastructure to continue providing the same level of check services going forward.\u201d\n <\/p>\n

\n A report <\/a>from the Federal Reserve Bank of Atlanta in June found that as of last year, more than 90% of surveyed consumers said they prefer to use something other than a check for paying bills, and just 6% paid by check. That\u2019s a sharp drop from the 18% of bills paid by checks as recently as 2017.\n <\/p>\n

\n Consumers also reported they view checks as second-worst for convenience and speed of payment, ahead of only money orders. And they\u2019re ranked as the least secure form of any payment other than cash.\n <\/p>\n

\n But even if it\u2019s true that options such as direct deposit, automatic bill paying and electronic payment systems such as Venmo, PayPal and Zelle have all reduced the need for traditional checks, paper checks are still an important part of the payment system. They make up about 5% of transactions and represent 21% of the value of all those payments, according to a statement from Michelle Bowman, the Fed\u2019s vice chair for supervision, who dissented from the Fed\u2019s Thursday statement.\n <\/p>\n

\n \u201cChecks remain important payment mechanisms for consumers and businesses,\u201d she said. \u201cDiscontinuing Federal Reserve check services is not an efficient solution to the growing problem of payments fraud, particularly in light of the ongoing role of checks in the payments system.\u201d\n <\/p>\n

\n The history of checks is a little uncertain, but they are thought to date back nearly 2,400 years. The first modern checks gained popularity more than 500 years ago.\n <\/p>\n

\n \u201c(In) the early 1500s, in Amsterdam, Holland, \u2026. people who had accumulated cash began depositing it with Dutch \u201ccashiers,\u201d for a fee, as a safer alternative to keeping the money at home, then the cashiers agreed to pay the debts out of the money in each account, based on the depositor\u2019s written order or \u201cnote\u201d to do so,\u201d said a post on the history of checking on the site of Checkeeper, an online check printing service.\n <\/p>\n

\n The end of paper checks could cause problems for consumers who don\u2019t have access to a traditional bank account and still depend on the small slips of paper to receive some of their funds, including their paycheck. About 6% of adults were \u201cunbanked\u201d in 2024, according to the Federal Reserve, meaning neither they nor their spouse or partner had a checking, savings, or money market account. That unbanked percentage rises to 22% for those with an income below $25,000.\n <\/p>\n

\n Older consumers who might not be as comfortable with new technologies, or the estimated 10% of Americans who don\u2019t even have smartphones<\/a>, could also be greatly disadvantage by a further move towards electronic payment systems.\n <\/p>\n

\n And checks can still be an important way for some merchants to be paid, or to save costs, rather than paying high transaction fees associated with accepting credit card payments.\n <\/p>\n

\n \u201cChecks are obviously not used nearly as much as they used to be, but they\u2019re still an important part of the financial system, especially for low-income people,\u201d said Doug Kantor, general counsel for the National Association of Convenience Stores, whose members often provide cash checking services for customers as well as accepting checks for some payments, such as auto repairs. He said it would cause untold and difficult-to-foresee problems to wind down the checking system.\n <\/p>\n

\n He also points out that many people still use checks to pay their monthly bills \u2013 in some cases without even realizing it \u2013 if they have directed their bank to make various payments on their behalf. He said he couldn\u2019t imagine winding down the checking system any time soon.\n <\/p>\n

\n \u201cAt some point, they may well be eliminated entirely. It\u2019s really hard to know how long a tail there is there,\u201d he said. \u201cI would think they\u2019re not ready to wind it down yet, and I would hope they\u2019re not ready to wind it down yet because there are significant numbers of people \u2013 a minority, no doubt \u2013 but still significant numbers who rely on the system.\u201d\n <\/p>\n","protected":false},"excerpt":{"rendered":"First the penny. Next, paper checks? When the US Mint stopped making pennies last month for the first…\n","protected":false},"author":2,"featured_media":328305,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":{"0":"post-328304","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/328304","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=328304"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/328304\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/328305"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=328304"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=328304"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=328304"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}