US Government Tempering Deadline for Paper Check Disbursements Elimination
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Lawmakers urge delay in ending federal paper checks
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Vulnerable groups risk exclusion and fraud with digital-only payments
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The waiver process for paper checks is confusing and bureaucratic
The US Government's initiative to eliminate paper checks has met with more resistance than initially expected. While digital transactions are faster and safer, the question of accessibility remained a huge concern, particularly with some US Senators.
As noted in a recent InDepthNH.org article, U.S. Senator Jeanne Shaheen (D-NH) joined Senators Angus King (I-ME) and Susan Collins (R-ME), as well as Representatives Chellie Pingree (D-ME-1) and Jared Golden (D-ME-2) urged the U.S. Treasury Department to delay the elimination of paper checks for Social Security, vendor payments, tax refunds, and other federal disbursements, as required by a new executive order. The legislators cite the vulnerability of “over 5 million households across the United States [that] do not have a checking or savings account at a bank or credit union,” noting a disproportionate impact on low-income, elderly, and disabled populations.
They assert, “These households are reliant on cash and paper checks. Overwhelmingly, older adults use cash and paper checks to conduct regular financial transactions”.
US Government "Quietly" Walks Back Deadline
It appears that the US Government has quietly walked back the hard deadline, as the aggressive timeline has been met with resistance -- particularly with Social Security disbursements.
According to the Altitudes Magazine:
In response to the widespread concerns and the advocacy from various groups, the Social Security Administration (SSA) has quietly delayed the full transition to electronic payments. Instead of a firm deadline, the SSA will now allow beneficiaries to continue receiving paper checks for the foreseeable future. This comes as part of a broader effort to accommodate those who are not yet ready or able to make the switch.
The article further notes that "beneficiaries who are currently receiving paper checks will still be encouraged to enroll in direct deposit or use the Direct Express prepaid debit card program, but they will not be forced to do so."
According to the SSA and Treasury, paper checks will remain available for:
- Older Americans who cannot easily access digital systems.
- Residents in rural or remote areas without reliable internet or banking services.
- Individuals with disabilities who face barriers to digital banking.
- Unbanked individuals—those without a checking or savings account.
The Future of Paper Checks
Inevitably, the US Government will most likely eliminate paper check disbursements -- probably not in the next few years or even decades. Will the US citizens and businesses follow in their footsteps?
Recently, we've seen countries -- including Australia and Singapore -- push initiatives to eliminate paper checks. However, this same scenario has played out in the United Kingdom, resulting in massive failure.
Additionally, we noted in a recent article that SMBs will most likely not follow in the footsteps.
Ultimately, any pending elimination of paper checks from the US payment system is exaggerated and will not occur for decades, if ever.