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01/04/2026
Federal Reserve considers ending paper check processing
MSN
The Federal Reserve is considering a major shift in its payment processing strategy by potentially ending the processing of paper checks. This move comes as part of a broader trend towards digital payments, driven by the declining use of checks, rising costs of maintaining outdated infrastructure, and increasing instances of check fraud. The Fed has initiated a public consultation to gather feedback from the public and industry stakeholders, with comments open until March 2026.
Reasons behind the potential change
The decline in check usage is a primary factor in the Fed's consideration. In 2024, only 7% of bills were paid by check, a significant drop from 19% in 2020. Additionally, maintaining the current system requires substantial investments in aging infrastructure. The rise in check fraud, highlighted by the FBI's 2025 warning about increased theft from mailboxes, further underscores the need for change. These factors collectively push the Fed to explore alternatives.
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