12/31/2025

Paper checks could disappear as Federal Reserve considers ending processing

41 NBC

(NBC)- Paper checks have long been a part of everyday life — from paying bills to cashing a paycheck — but that familiar form of payment may soon be on its way out.

The Federal Reserve says it is considering overhauling or possibly winding down its check processing services, citing a sharp decline in usage and a rise in check fraud. In a recent notice, the Fed wrote that digital payment methods have grown significantly, while check use continues to fall.

Experts say such a move could trigger a ripple effect across the banking industry.

“You can easily see the domino effect,” said Caleb Silver, editor-in-chief of Investopedia. “If the central bank stops issuing physical checks, then banks might stop using checks over the next few years. If it’s not happening from the government, why would it continue in the private sector?”

The potential shift comes as other institutions have already moved away from paper payments. In September, the Social Security Administration stopped sending benefit payments by check, switching instead to direct deposit and prepaid debit cards, citing faster delivery, improved security, and lower costs.