- Key insight: How we manage the elimination of paper checks will shape the speed, safety and resilience of the financial system for years to come.
- What's at stake: Every day that the system relies on checks it carries unnecessary cost, friction and exposure to fraud.
Forward look: The Federal Reserve's review of its check services is an opportunity to help guide the final phase of this transition.
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A few months ago, the Federal Reserve took an important, if largely under-the-radar, step by
Today, it remains a
Check usage is declining, but check fraud is accelerating. In 2023, check fraud caused $21 billion in losses. That imbalance is not sustainable. The case for moving away from checks is no longer just about efficiency but fundamentally about reducing risk. Reducing that exposure could keep tens of billions of dollars in the economy each year, a powerful example of what payments innovation can deliver for consumers and businesses across the country.
The alternative is already here. Today, money can move in seconds between verified accounts, without exposing sensitive financial information, and with fraud detection operating in real time. These capabilities already exist at a national scale across digital payment networks that reach the vast majority of U.S. accounts.
The challenge now is not whether to replace checks, but how to complete the transition in a way that strengthens the system.
Checks may be outdated, but they continue to serve specific roles in parts of the economy, including certain business workflows, government disbursements and communities where digital adoption has lagged. Replacing that infrastructure requires more than simply turning it off. If not executed carefully, the transition could introduce new friction, increase disputes and create gaps in access.
An executive order requiring the government to stop issuing paper checks is expected to help banks, which have seen a rise in check fraud with the introduction of mobile deposits and digital check imaging.
Digital payments can and must fully meet those needs. That means systems that are secure against fraud and account compromise, widely accepted across consumers and businesses, interoperable across institutions, and accessible to small businesses, community banks, and underserved populations, ensuring the benefits of a modern payments system are broadly shared across the economy.
The Federal Reserve's review of its check services is an opportunity to help guide the final phase of this transition. This is not just about winding down legacy infrastructure. It is about making sure what comes next preserves trust, stability and broad access.
That will require coordination across the industry: maintaining reliability where it is still needed, while accelerating adoption of safer, more efficient electronic alternatives, alongside clear expectations, consumer education, and data-driven oversight.
Every day that the system relies on checks it carries unnecessary cost, friction and exposure to fraud.
Successfully executed, this transition will deliver a more inclusive system that creates real economic value for the people and businesses that rely on it.
The Federal Reserve has an opportunity to help lead this next phase of payments modernization, in close partnership with the industry. It is important to support that effort and to help ensure the transition away from checks is completed in a way that is secure, inclusive and built to last.
