Future of Paper Checks in Doubt As Billions Still Written Every Year

With Donald Trump ordering an end to most government papers checks, it may seem that such financial documents are going the way of the penny. But one business professor says not so fast, they are still an important piece of the American economy. Indeed, your banking app may be sending them without telling you. Younger consumers consider checks an antiquated form of payment. According to a survey released last summer, just 26% of Generation Z college graduates have ever written a check. Only 22% have balanced a checkbook. Still, more than half have at least opened a checking account. In the wider economy, checks are still a big deal. They are still being processed in billions of transactions a year. A Boston University Questrom School of Business professor, Jay Zagorsky, studied check usage for an article he authored this month on the future of paper checks.“I’m actually writing a fair number of checks without actually realizing it,” Mr. Zagorsky told The New York Sun. “Last month when I paid my bills. I actually had 2 checks that were being sent for me on my behalf. And I don’t think people realize that checks are still being used,” Mr. Zagorsky added. That’s because many payments are made online or through a banking app, the payment is actually sent as a paper check.The Federal Reserve’s latest report on the types of payments being used across the country found 9 billion checks were used in America in 2024. “Which is pretty amazing,” Mr. Zagrosky said of the large number despite being dwarfed by digital payments.The central bank acts as a clearing house of almost a third of all checks in America. It handles checks that are not among large commercial banks in the same city or region. “So if you wrote a check on, say, a California bank and you were in New York City, the check had to basically go through some national clearance and that was the Federal Reserve,” Mr. Zagorsky said.But the central bank is considering exiting the check processing business because of the rise of digital payments, rising costs associated with processing checks, and a growing problem of check fraud. The Fed needs to spend millions to update its check processing infrastructure and it is not sure if it is worth the cost. It asked for public input at the start of the year but has not come up with a final decision yet.“If the Federal Reserve exits the business, then some of these smaller clearing houses would have to sort of pick up the slack,” Mr. Zagorsky says.Mr. Zagorsky says another possibility is the end of the use of paper checks all-together. Germany is phasing out checks by the end of next year. Australia is ending check use in 2030. President Trump, last year, signed an executive order directing all federal departments to end the use of paper checks for disbursements, including Social Security. Some large retailers, including Target and Whole Foods, already no longer accept checks. But Mr. Zagorsky is against the end of checks in America. He calls himself “one of the few advocates for paper money in the world” and says there are still plenty of people who want to personally touch their transactions.Mr. Zagorsky says a lot of small businesses like and encourage check usage because of the costs associated with digital transactions. Those costs are the impetus for a growing trend of surcharges for paying by credit card. For large purchases the difference in price between paying by check or credit card can be $50 or more. “It starts adding up quite quickly,” Mr. Zagorsky says.“Should people in government just say, ‘Okay, we’re getting rid of it because it’s more efficient for government,'” Mr. Zagorsky asks. “What’s the real idea of government? Is it to help people do what they want to do or is it to make decisions for us?”Mr. Zagorsky says similar to people still using pennies, they are still using checks.“I’m not sure we should be getting rid of something that people with their actions show that they really like,” Mr. Zagorsky says.

Future of Paper Checks in Doubt As Billions Still Written Every Year

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