Checkbooks could go the way of the penny
The payment method has seen a steep drop in popularity in recent years, prompting the Fed to question if it needs to remain
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Your checkbook could soon be as obsolete as the penny in your change jar.
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With changes in place to the nation's cash currency, federal officials are now debating the fate of the paper check. The Federal Reserve, last week, issued a call for public input on what it called "potential strategic changes to check services."
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Included in the list of potential changes was "significantly reducing check services, or alternatively, substantially winding them down." The Fed is giving people 90 days to comment on the fate of checks.
Federal Reserve banks charge commercial banks a fee for check collection and processing services. Usage of checks has declined, though, as people lean more towards credit cards and digital payments, and check fraud continues to be a problem.
The Fed says it would need to make substantial investments in its check infrastructure to continue providing the same level of check services in the future. It's not sure if the investment is worth it, thus the request for public comment.
The government has already pulled back from paper checks this year. The Social Security Administration (SSA) stopped mailing paper benefit checks as of Sept. 30, switching over to electronic payments only. The move to electronic payments was part of an executive order signed by Donald Trump in March. It was designed to save the government money and reduce fraud. Checks cost roughly 50 cents to issue, while electronic payments work out to just 15 cents.
Just one percent of people on Social Security rely on paper checks. Come tax season, though, it could be a more jarring transition. Two out of every 10 taxpayers get their refunds via check, according to the IRS. Many of those people do not have bank accounts, often because they are homeless, disabled, or don't feel comfortable sharing their personal financial information with the government.
Forcing people to take electronic payments for government benefits is one thing. Discontinuing checks as a payment option could be another entirely, though. A 2025 study by the Atlanta Fed found that just 7% of Americans prefer to pay their bills by check, compared to 19% in 2020.