Germany is getting rid of paper checks on the end of 2027. Australia is bidding them farewell by 2030. U.S. President Donald Trump adopted up his order killing off the penny with an executive order stopping check writing by the federal government.
Ought to the U.S. observe these different nations and broadly eradicate the power to jot down checks?
Years in the past, specialists predicted that checks would have disappeared by now. Nonetheless, they’re nonetheless round, and billions are written annually in the USA.
Why? The fast reply is that businesses love them. And loads of Individuals nonetheless use checks for good causes. However there may be extra to the story.
I am a business school professor and one of many few teachers who advocates for the use of cash. Whereas I’ve lengthy informed everybody about the benefits of paper money, I didn’t give paper checks a lot thought or use them till my mom’s latest loss of life. Then I discovered myself writing checks to the cemetery, funeral residence, headstone engraver and a bunch of different locations. Plus, I began getting refund checks again from her landlord and insurance coverage corporations.
These experiences made me look extra deeply into this type of cost to grasp what was occurring.
Fewer checks for greater bucks
Each three years the U.S. authorities runs the Federal Reserve Payments Study by asking banks and credit score unions for inside data. This survey tracks every thing from how usually bank cards are used to the variety of checks written.
Whereas check usage has sharply declined within the U.S., a big quantity – about 9.2 billion in 2024 – are nonetheless written, the info exhibits. The face worth of these checks might be greater than you’d anticipate: greater than US$24 trillion, not adjusted for inflation. That’s nearly as giant as U.S. gross domestic product of $29 trillion that 12 months.
Not everybody can think about numbers in billions or trillions, so let’s put these figures in additional manageable phrases.
Just a little over 150 checks have been written per particular person in 2000. By 2024, the typical had plummeted to 27 checks – barely greater than two per thirty days. Nonetheless, over that point, the quantities sometimes scribbled or printed on the face of these checks rose.
In 2000, the everyday examine was value lower than $1,000. By 2024, the typical quantity had greater than doubled to $2,600.
Trends elsewhere are comparable. The Bank for International Settlements, which serves as a financial institution for central banks just like the Federal Reserve, has tracked check usage in 25 countries since 2012. Its knowledge exhibits that in solely two different nations is cost by examine nonetheless commonplace.
And in each of these nations, examine utilization has fallen extra sharply than in the USA.
Who makes use of checks as we speak?
Whereas check payments have declined, there are nonetheless two large teams of examine writers in the USA.
The Federal Reserve Financial institution of Atlanta runs the Survey and Diary of Consumer Payment Choice. This survey asks individuals, reasonably than banks, for data on their cost habits. Roughly one-third of all respondents acknowledged they used a paper examine prior to now 30 days.
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Not surprisingly, the solutions differ by age. About 60% of individuals 65 and over say they wrote a examine. Amongst these 18 to 24, underneath 6% stated they did.
It additionally seems that lots of people who suppose they by no means write checks truly unknowingly do it on a regular basis. In the event you pay your payments on-line, your financial institution tries to pay them electronically. If it cannot electronically make the payment, the bank cuts a paper check in your behalf. Any on-line invoice cost taking greater than a few enterprise days to publish is being despatched by examine.
One other necessary issue is that small businesses love checks. Over 80% of companies with gross sales between $1 and $10 million make funds utilizing checks. Why? Small companies usually require two signatures on a examine. The necessity for signatures means homeowners need to signal their title earlier than any cash goes out the door. This provides them management over cash and a transparent thought who’s getting paid and the way a lot.
Small companies additionally like receiving checks. I wrote numerous checks after my mom’s loss of life as a result of a lot of these small companies I handled wished an extra 3% and sometimes more to cover the cost to them of a bank card cost. Writing paper checks saved me and the companies some huge cash.
The longer term
Whereas many Individuals nonetheless write checks, their declining utilization clearly underscores that they don’t seem to be ideally suited for making funds in all conditions.
One of many largest issues with checks is that you simply by no means know if the examine author has ample funds to cowl the quantity. When an account doesn’t come up with the money for, the check bounces. The Federal Reserve, which clears about one-third of all U.S. checks, returned about 22 million checks, with a complete face worth of round $80 billion. Whereas these numbers are giant, over 99% of all checks written don’t bounce.
One other downside with checks is forgery. Thieves steal checks from mailboxes, alter information after which money them. The most recent figures present about 500,000 annual circumstances of examine fraud within the U.S. Once more, whereas a half-million is giant, it’s a tiny fraction of the 9.2 billion checks written yearly.
Due to these issues, the Federal Reserve is contemplating leaving the check processing enterprise. In early 2026, it accepted public comments on whether or not it ought to wind down, enhance or depart alone its check processing unit.
The unit, which prices about $100 million a year to run, turned a $6.6 million revenue in 2024. However its machines want changing, and the Federal Reserve is wavering on spending the cash.
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Ought to checks be killed off like the penny, which the federal government stopped minting in 2025, and the haypenny, which was value half a cent and hasn’t been produced since 1857?
For me, the reply is a transparent no. Whereas checks are clearly much less necessary as we speak than prior to now, the numbers present that the American individuals and companies nonetheless use and want checks.