US bank groups call for quick transition as Treasury phases out paper cheques
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In March, President Donald Trump ordered the US federal government to phase out the use of paper cheques and to centralise payment processing in an effort to crack down on fraud. In an executive order, Trump said the use of paper cheques and money orders into and out of the United States Government Fund "imposes unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies".
The US Treasury followed up the executive order with a request for information, which the Bank Policy Institute, The Clearing House Association and the Consumer Bankers Association have now responded to, urging prompt action to fully transition to secure, modern electronic payment methods and minimise the use of cheques.
'Removing paper Treasury checks from circulation is an important step toward reducing theft and the related losses to the federal government and financial institutions,' the groups write. 'Treasury's efforts to phase out paper checks in government payments represent a critical opportunity to modernize America's payment infrastructure, reduce fraud and increase financial security for American taxpayers.'
They are calling for a public awareness campaign to educate Americans on electronic payments, an expansion of the government's use of existing electronic payment platforms, and an investment in fraud detection tools such as ID verification.
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