The White House issued an executive order Tuesday directing the U.S. Treasury Department to eliminate check usage for all federal disbursements, including tax refunds and intragovernmental, benefits and vendor payments. Citing unnecessary costs, delays and security risks, the order mandates that the federal government ceases to use checks by Sept. 30, 2025. Payments to the government must also be made electronically where allowable under existing law.

Checks continue to be a constant fixture in the U.S. payments space, despite major efforts by industry stakeholders to move both businesses and consumers to digital methods. But with the federal government now making an even bigger push to reduce check usage, perhaps the United States is finally reaching the tipping point.

Can Paper Checks Be Phased Out?

With their slow processing times and high susceptibility to fraud, many organizations have sought to reduce check usage in the U.S. for years.

The American Bankers Association (ABA), which welcomed the Executive Order, launched its #PracticeSafeChecks program last fall. The initiative educates consumers on safe check practices while simultaneously encouraging them to move to digital payment methods. “The bottom line: Electronic payments are a much faster, cheaper and safer choice for consumers and the federal government,” said ABA President and CEO Rob Nichols.

Nacha also lauded the order, with CEO Jane Larimer noting that checks are “slow, costly, and prone to theft and fraud, especially in comparison to Direct Deposit.” In 2023, Nacha filed comments supporting the Treasury Department’s strengthening of a requirement that the federal government use electronic disbursements for non-tax payments.

But while industry stakeholders have made efforts to eliminate checks—and usage has slowly gone down—many organizations continue to rely on them. According to the 2024 AFP Payments Fraud and Control Survey, 75% of organizations continue to use checks, and 70% of them have no plans to stop using them. That’s despite fraudsters targeting checks more than any other payment method in 2023, with 65% of organizations experiencing actual or attempted check fraud. 

We can’t share the full results of the 2025 AFP Payments Fraud and Control Survey yet, which will be released on April 15. However, we can say that (unsurprisingly) treasury and finance professionals identified checks as the payment method most subjected to fraud in 2024. Perhaps more concerning, however, is that even more respondents said they use checks than the previous survey and there was a higher percentage of respondents who have no plans to reduce check usage in the next two years.

And fraud isn’t the only issue; AFP research also found that checks are considerably more expensive than electronic payment methods. According to the 2022 AFP Payments Cost Benchmarking Survey, the median transaction costs for issuing ($2.01 to $4.00) and receiving ($1.01 to $2.00) a check is much lower than issuing or receiving an ACH transaction ($0.26-$0.50). Even though the overall volume of checks has decreased over the years, checks likely have the highest labor cost associated with them due to all the processes involved around controls, application and reconciliation. As enterprise payments teams look to streamline accounts payable and accounts receivable processes, they should look towards eliminating checks altogether.

Are Checks Going Away in 2026?

Given that the Treasury Department has until the end of September to phase out checks, it’s unlikely that we’ll see a dramatic drop-off in check usage this year. But what about 2026? Government payments have been one area where checks are still widely used, with 23% of benefit recipients still receiving assistance by check or voucher. While the government will find challenges converting individuals who are unbanked or don’t have electronic payment access, it’s important to recognize that most government payments are already electronic. Nacha noted that Direct Deposit is used for 100% of federal employee payments, 99% of Social Security benefits, and 97% of veterans’ benefits and tax refunds.

Still, with major players working to move the needle on checks and the government increasing its efforts as well, perhaps we will soon witness the last gasp for check usage in the U.S. That is, if businesses and consumers can finally let go.

For more insights, see the 2025 AFP Payments Fraud and Control Survey and check out our new approach to addressing check fraud.