As the world increasingly embraces digital transactions, several countries are taking definitive steps to phase out traditional paper checks. Germany plans to eliminate checks by the end of 2027, while Australia aims for a complete phase-out by 2030. In a similar move, former U.S. President Donald Trump issued an executive order to halt check writing by the federal government.
The question arises: Should the U.S. follow suit and broadly eliminate the ability to write checks?
Contrary to past predictions that checks would be obsolete by now, billions are still written annually in the United States. The enduring use of checks can largely be attributed to their popularity among businesses, though many Americans also continue to use them for valid reasons.
As a business school professor and advocate for cash, I hadn’t put much thought into checks until faced with the practical need during the arrangements following my mother’s passing, where checks were essential for various payments.
Declining Usage, Rising Values
The U.S. government conducts the Federal Reserve Payments Study every three years, monitoring various payment methods. Despite a significant decline in check usage, about 9.2 billion checks were still written in 2024, collectively valued at over $24 trillion, which is nearly as much as the U.S. GDP that year.
In 2000, the average American wrote over 150 checks annually, but by 2024, this number had plummeted to 27 checks per person per year. However, the average value per check more than doubled, from under $1,000 to $2,600.
Internationally, check usage is similarly declining. The Bank for International Settlements has been tracking this trend since 2012, noting that only a few countries still commonly use checks, with a sharper decline seen compared to the U.S.
Current Check Users
The Federal Reserve Bank of Atlanta’s Survey and Diary of Consumer Payment Choice reveals that about one-third of Americans reported using a check within the past month. Age plays a significant role, with approximately 60% of those aged 65 and older having written a check, compared to less than 6% of those aged 18 to 24.
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Interestingly, many people who believe they don’t write checks are mistaken. Online bill payments often result in banks issuing checks on behalf of their customers when electronic transfers aren’t possible. Delays in online payments often indicate a check is being used.
Small businesses remain significant users of checks, with over 80% of businesses with sales between $1 and $10 million utilizing them for payments. Checks provide a level of control, requiring signatures before money leaves the business. Additionally, many small businesses prefer checks to avoid the fees associated with credit card transactions.
Challenges and Considerations
Checks present several challenges, including insufficient funds leading to bounced checks. The Federal Reserve reported about 22 million checks returned in 2024, valued at roughly $80 billion. Despite this, over 99% of checks successfully clear.
Check forgery is another concern, with about 500,000 cases of check fraud reported annually. However, this figure is small compared to the volume of checks written.
The Federal Reserve is contemplating its role in check processing due to these issues, seeking public input on whether to maintain, improve, or phase out its check processing unit, which operates at a considerable cost.
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The debate over whether checks should be phased out like the penny, discontinued in 2025, or the half-cent coin, last minted in 1857, continues. Despite declining usage, checks remain a crucial tool for many American individuals and businesses.
