The federal government has long wante🃏d to stop using paper checks and, with its latest push, could encourage others to eradicate the form of payment.

President Donald Trump has called on the federal government to abandon paper and fully switch to direct deposits, card payments, and other digital methods. It’s already most of the way there, with 99% of Social Security beneficiaries and 97% of veterans . But finishing the job has been tricky in the past, as illustrated in a partially failed effort to stop government check payments by 1999.

“We have been trying to kill the check for 30 years, and we, as an industry, have really just not been successful in doing that,” said Peter T🍰apling, a consultant and veteran payments industry executive.

However, this executive order could pr🉐od the entire U.S. payment system closer tꦫo a paperless future.

Why Is This Happening Now?

The government's switchover is expected to take place on Sept. 30 and will allow some exceptions for those without banking or electronic payment access

The good news is that “a ᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚlot of the infrastructuꩵre is already in place” to make the switch, said Scott Anchin, a payments expert at the Independent Community Bankers of America, a trade group that represents smaller banks. And consumers have gotten far more accustomed to digital payment methods.

“People are becoming more and more accepting of technology,” he said. “They understand the spe✤ed, sa൲fety and efficiency benefits from electronic payments.”

The golden days of checks are clearly over. Checks were used in just $11.2 billion in transactions in 2021, down from a peak of $49.5 billion in 1995, according to a Washington Post analysis of Federal Reserve data.

Despite fewer people using checks, fraud has risen sharply since the pandemic. Fraudsters steal checks in the mail at alarming rates and sell them in underground markets. Banks reported some 680,000 potential check fraud cases in 2022, up from 350,000 in 2021, according to the Treasury Department’s Financial Crimes Enforcement Network.

Removing checks from the federal government will eliminate a “significant vector of check fraud,” Anchin said. But its leadership should also help accelerate the “societal shift away from paper instruments” and to electronic ones, he sai𝓀d.

Who Still Uses Checks?

For individuals, checks are still popular for big-ticket items like payments to contractors or doctors, as well as down payments or gifts. Many businesses use checks often, too, and from the Association for Financial Professionals found few signs of a major shift ahead.

Even though 65% of respondents reported actual o🌠r attempted check fraud in their organizations, 70% of those who use checks said they weren’t planning on stopping.

There are also some features of checks that the industry has “not recreated in digital payments,” said Tapling, the payments consultant. For example, s🔜ome businesses use checks with multiple signatures for larger amounts. Insurers also of🐷ten use multi-party checks to manage accident claims.

“It’s indoctrinated into the way s﷽ome businesses do work,” Tapling said.

However, Tapling said the federal government’s shift can have ripple effects, as agencies are major buyers of private services. And, even though some citizens may resist the government's shift to digital, he also noted that newer generations are completely unfamiliar with checks or bank branches.

“We’re going to have to change habits,” Tapling said. “But we’re also going to age out of that habit.”