Latest news with #paperchecks
CNET
5 days ago
- Business
- CNET
Paper Social Security Checks Phasing Out in September 2025, but Exceptions Are Possible
If you get your Social Security payment in the form of a paper check, you'll need to switch to an electronic payment option instead soon. If you're used to receiving your Social Security or other federal payments in the form of paper checks, you're in for a change soon. Starting in September, all federal disbursements, including Social Security, SSDI, SSI and tax refunds will be sent electronically, ending the era of paper payments. The vast majority of Social Security, SSDI, Supplemental Security Income and tax refunds are sent electronically already, so the transition will affect only a small portion of Americans -- but that's still tens or even hundreds of thousands of individuals. As of July 2025, 521,644 households are still receiving paper checks out of the 68 million total Social Security recipients. These peoples may have a harder time moving forward to a digital form of payment, whether they don't have access to banking services or doing so would create more of a hardship. Luckily, exceptions can be made in certain circumstances. Below, we'll go over why the move to digital is happening, how to prepare if you or someone you care for are still receiving paper checks and the exceptions to the order. For more, check out the Social Security payment schedule for this month. Why is the US transitioning to digital payments? The move to a digital payment system for federal payments, like Social Security, was announced in an executive order by the Trump administration on March 25, 2025. The title of the order sums it up pretty clearly: Modernizing Payments To and From America's Bank Account. The order says that using paper checks for federal disbursements imposes unnecessary costs and risks, including fraud, lost payments and theft. It also notes that mail theft complaints have substantially increased since the COVID-19 pandemic and that checks are 16 times more likely to be reported as lost, stolen or returned as undeliverable compared to an electronic funds transfer payment. The executive order says the goal of this transition is to defend against fraud, reduce costs, improve efficiency and increase the overall security of federal payments. What federal payments are going digital? According to the executive order, all federal payments will go digital by Sept. 30, 2025. That's well ahead of the next tax season. However, those who still rely on monthly paper checks for programs like Social Security will need to prepare sooner. Here are all of the forms of federal disbursements transitioning to digital: Intragovernmental payments Benefits payments (Social Security, SSDI, SSI) Vendor payments Tax refunds Digital payment methods include direct deposit, debit and prepaid cards that can be mailed to you, digital wallets and real-time payment systems. What are the exceptions to this order? The order acknowledges that the transition to digital payments may not necessarily be feasible for all people, so there are exceptions that will be made for the following situations: People who do not have access to banking services of electronic payments. Certain emergency payments where an electronic payment would cause undue hardship. Certain national security or law enforcement activities where non-EFT transactions are necessary or desirable. Specific circumstances as determined by the Secretary of the Treasury People or entities that qualify for an exception will be provided with alternative payment options. Social Security recipient? Here's how to prepare For payments such as tax returns, all you need to do is opt for the direct deposit option while filing taxes. It's that easy. However, if you receive Social Security benefits or Supplemental Security Income in the form of a monthly check, you'll need to make preparations for the upcoming transition. This can be done in one of two ways: Signing up for electronic payments via the Treasury's Go Direct website. You can also call the Treasury's Electronic Payment Solution Center at 1-800-333-1795. Signing in or signing up for a My Social Security account to start or update your direct deposit information. For more, check out our Social Security and SSDI cheat sheet.
Fast Company
6 days ago
- Business
- Fast Company
Social Security benefits update: SSA is making a major change this year that will impact many seniors
The Social Security Administration (SSA) will officially stop issuing paper checks. The transition, which aims 'to improve efficiency, security, and ensure beneficiaries receive their monthly benefits promptly,' will come into effect starting September 30, 2025. Beneficiaries should receive electronic funds transfers (EFTs) quicker than the time it takes for a check to arrive in the mail. Electronic payments should also be more secure, with the SSA claiming a paper check is 16 times more likely to be stolen or lost. Meanwhile, the federal government will financially benefit from the change. It costs about 50 cents to mail a paper check, while the EFT should cost under 15 cents. How many people will be impacted by this change? The SSA claims that less than 1% of recipients still get paper checks. As paper checks are phased out for Social Security benefits, individuals can either enroll in direct deposit through their bank or get a Direct Express card. The latter works as a prepaid debit card with just the federal benefits added to it, meaning you don't need a bank account to use it. A survey by the Federal Deposit Insurance Corporation (FDIC) last year found that about 5.6 million U.S. households were unbanked in 2023. Although the percentage of people without bank accounts is declining overall, certain populations are disproportionately impacted, according to the FDIC. Those include low-income households, Black and Hispanic households, and people who are disabled, have less formal education, or are in single-parent households. The plan to 'gradually' eliminate paper checks actually dates back to 2010, according to the Department of Treasury. However, a lot of recipients may just be hearing about it after the SSA posted an alert on Monday. Comments on that page suggest many are unhappy with the change. 'What steps are being taken to assist the elderly and physically / visually handicapped paper check recipients?' one commenter stated. 'What will SSA do if, on 30 September, there are hundreds of thousands of benefit recipients who have not set up electronic payments? Just not send them their payments?' another commenter asked. The SSA claims it is 'proactively' sending notices to beneficiaries who receive paper checks and explaining how to make the change. Their technicians should also be able to help with the transition.
Forbes
14-07-2025
- Business
- Forbes
Social Security Administration Tells Beneficiaries To Make The Switch Now From Paper Checks
PHILADELPHIA - FEBRUARY 11: Blank Social Security checks are run through a printer at the U.S. Treasury printing facility February 11, 2005 in Philadelphia, Pennsylvania. (Photo by William) Getty Images The federal government must stop issuing paper checks by September 30 in favor of direct deposit, prepaid cards, or other digital payment options—that's according to an Executive Order signed by President Donald Trump in March of this year. Now, the Social Security Administration has provided additional guidance for Social Security beneficiaries. According to the agency, the transition primarily affects a small group of beneficiaries who have not yet switched over to electronic payments. The Social Security Administration said in its most recent communication that less than one percent of beneficiaries currently receive paper checks. Last year, 512,690 Americans—about 0.8% of the more than 68 million total recipients—drew Social Security benefits checks. Approximately 67,826,776 Americans receive benefits by Direct Deposit. (The number of paper checks issued by the IRS is less robust. The most recent filing data from the tax agency indicates that most tax refunds for individual federal income tax returns are issued by direct deposit. To date in 2025, 86,937,000 of the 93,569,000 taxpayer refunds were issued by direct deposit—just under 93%.) According to the order, using paper checks and money orders results in costs, delays, risks of fraud, lost payments, theft, and inefficiencies. It highlights that, historically, Department of the Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable, or altered compared to an electronic funds transfer (EFT). (Earlier this year, the federal government alleged that four postal workers in Philadelphia stole thousands of envelopes containing U.S. Treasury checks from mail sorting machines to sell on the internet. A few months before that, a former U.S. Postal Service employee was found guilty of stealing nearly 100 checks, including tax refund checks, totaling over $1.6 million.) Waste is also a concern: The order says that maintaining the physical infrastructure and specialized technology for digitizing paper records costs the American taxpayer over $657 million in Fiscal Year 2024 alone. When it comes to Social Security benefits, the agency says that Electronic Funds Transfers (EFTs) are processed more quickly than paper checks, helping beneficiaries receive their payments on time without delays. It's also cheaper: According to the U.S. Department of the Treasury, issuing a paper check costs about 50 cents, whereas an EFT costs less than 15 cents. How Can Beneficiaries Switch Over? The Social Security Administration is currently sending notices to people who still receive paper checks to explain the upcoming change and highlight the benefits of switching to electronic payments. All benefit checks will also include an insert detailing the steps beneficiaries can take to switch to electronic payments, with Social Security Administration staff ready to assist. Payment Options Beneficiaries who currently receive paper checks can opt to receive their Social Security payments electronically via Direct Deposit or a Direct Express Card. With Direct Deposit, payments can be deposited directly into a checking or savings account. Beneficiaries can enroll with their banks or financial institutions. If you already receive Social Security or SSI benefits and you have a bank account, you can also sign up for direct deposit by starting or changing direct deposit online or calling Social Security (1.800.772.1213 or TTY 1.800.325.0778), or visiting your local Social Security Field Office. The Direct Express Card is a prepaid debit card designed specifically for federal benefit payments—this is an option for those who do not have a bank account (the unbanked). To get Direct Express, call the U.S. Treasury Electronic Payment Solution Center at 1.877.874.6347 to enroll! You will need your Social Security number, information from your most recent federal benefit check or claim number, and your date of birth. Unbanked Individuals Who qualifies as unbanked? According to the Federal Deposit Insurance Corporation (FDIC), a household is considered unbanked if no one in the household has a checking or savings account at a bank or credit union. In 2023, 4.2% of U.S. households—about 5.6 million households— were unbanked. Unbanked rates are higher for certain populations, including those who are likely to receive benefits, such as lower-income households. Rates are also higher for minority populations, including Black, Hispanic, and American Indian or Alaska Native households, and working-age households with a disability. For working-age households with a disability, the unbanked rate in 2023 was 11.2%—that's three times higher than the unbanked rate among working-age households without a disability. For single-parent households, the unbanked rate was 12.3%—more than five times higher than the unbanked rate among married-couple households with one or more children. And while mobile banking is on the rise, meeting with a real person—bank tellers—remains the most prevalent primary method of account access for households aged 65 or older. Seniors and disabled persons likely make up the lion's share of the nearly half a million Americans still receiving paper Social Security checks. Before the order, the Social Security Administration had already been trying to move beneficiaries to electronic services, noting that they would receive their payments much faster. Exceptions Apply Some exceptions apply, including for individuals who do not have access to banking services or electronic payment systems, as well as certain emergency payments where electronic disbursement would cause undue hardship. For more information or to request a waiver, call Treasury at 855.290.1545. You may also print and complete a waiver form, then return it to the address indicated on the form. Payments Need To Be Electronic, Too The order doesn't just apply to disbursements. It also applies to receipts—meaning payments that Americans make to the federal government, such as tax payments. Agencies, including the Treasury, Health and Human Services, the Department of Education, and Veterans Affairs, have been directed to 'expedite requirements' to receive the payment of federal receipts, including fees, fines, loans, and taxes. The IRS Is Switching Over, Too The IRS has also been encouraging taxpayers to use direct deposit. The agency claims it is the quickest and most efficient way to receive your tax refund. If you don't have a bank account but possess a prepaid debit card, you might be able to have your refund deposited onto that card. Additionally, some payment apps like CashApp allow for the direct deposit of refund checks. Be sure to check with your platform or financial institution to determine if this option is available, and also to determine the routing number and account number, which may be different from the card number. Despite the push, one group of taxpayers may be out of luck: American taxpayers living abroad. If you live outside the country, your federal income tax refund can only be deposited directly into a U.S. bank account or an affiliated account. SSA has similar—though a bit more generous—rules for beneficiaries living abroad. You can only direct deposit Social Security payments into a U.S. financial institution or a financial institution in a country with an international direct deposit agreement (a list of these countries can be found here). Forbes Former Postal Worker Stole More Than $1.6 Million In Checks, Including Tax Refunds By Kelly Phillips Erb Forbes Four Charged In Scheme To Steal Tens Of Millions Of Dollars In Treasury Checks From The Post Office By Kelly Phillips Erb Forbes Social Security Benefits Will Increase 2.5% In 2025 By Kelly Phillips Erb
Yahoo
02-07-2025
- Business
- Yahoo
Small business isn't quitting checks
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Each year, the smallest U.S. companies — solo practitioners, landscapers, dog walkers or those with a few employees — handle trillions of dollars of payments via paper checks sent through the postal system. Lest one thinks this centuries-old payment method is disappearing in the age of the digital wallet and instant payment clearing, it is not. In fact, paper check use has surged, with more than 90% of businesses using them, according to a report from the Association for Financial Professionals issued in April. 'They're not ready for change,' said Dan Holt, co-founder and chief executive of BillGO, a startup that tries to resolve cash-flow problems for small companies by converting incoming paper checks into digital payments. About 33 million U.S. small businesses receive $6 trillion annually in paper-check payments, Holt said. The company, based in Fort Collins, Colorado, has 154 employees and has raised about $187 million over the past decade since its founding. BillGO counts 75,000 customers and partner institutions in its payment network, called BillGO Exchange. The platform integrates with bank infrastructure and works with various software tools such as QuickBooks and NetSuite to coordinate incoming payments with invoices and reconcile those. That can accelerate payments from an average 10-day waiting period to as little as one business day, BillGO says. Holt spoke with Payments Dive on June 27. This conversation has been edited for clarity and brevity. DAN HOLT: The number one reason they sign up is cash flow. You're taking something that takes ten days to get to me. You're giving it to me — it's in my bank account the next day. Number two, the part that's been fascinating to me: we've probably made a million reach-outs — whether calls, emails, whatever — the one thing that is very consistent is we have not found a single small business that has not had check fraud, an NSF (insufficient funds) or some type of a loss related to their payments with checks. We're going to keep seeing checks easily for 20 years. No doubt about that. I don't think we're out of it faster than that. We are unique here in the U.S. I don't think there's another country in the world that has 10,000 banks and credit unions. The complexity of that, along with the complexity that we have with all of these different software providers that provide embedded payments. How are all those providers going to connect with all these other businesses? They don't, and so what ends up happening is, if you use an application like Bill, or use an application like QuickBooks, say you want to make a payment, on a business side, 40% of the time it goes out as a physical check. You don't even know that it's happening because you're working with an application that seems digital, but the payment routing, there's not a connection. Anybody that's receiving a payment from the government that was a check, you're going to be forced into going digital, right? And I think it creates momentum. Now, how much are they going to be able to pull off? I don't know. The government says a lot of things, and I take it a little bit with a grain of salt, because it takes a long time. Not saying it won't happen, but it just takes a long time. Something that is still blowing my mind today is the percentage of people that choose virtual card over ACH. We started BillGO Exchange as ACH only. We found, as we talked with a lot of potential customers, they didn't want the ACH. Why? Because (payments) all come in so differently, and they don't have a good way to reconcile it back and forth. Whereas their merchant acquiring system to accept card is already integrated into their accounts receivable. What fascinates me is 95% of our small businesses choose virtual card over ACH. If you're a small business, you're manually going to your bank and checking for every single ACH, and then you're trying to reconcile it. And then, when we send you a card, and we send you the invoice data as well, that then can be automatically reconciled, and we have the ability to help them reconcile their ACH, but they still choose (the) card. Something that we found is people have had issues with ACH and chargebacks and things of that nature. There's more trust in the card network. Now, of course, The Clearing House would hate for me to say this, and so would the Federal Reserve, but Visa and Mastercard would love me saying this: we found that at the actual small business that (network) brand is very valuable and they trust it a lot. This is not new, and they're struggling to get people to sign up for it. You know, we also love our points. When we make a payment, it's really a business-to-business payment. This is coming from BillGO to them. But on the consumer side, we're still seeing people choose their card, whether it's debit, credit, they choose their card. They have more trust in it. Most people are not comfortable with some retailer just having access to their bank account. Yep. And if you've ever experienced how this works in banking, if you've ever experienced a chargeback on ACH, the bank does not give you the money right away. They wait 60 days. They don't have to give it to you. Visa, Mastercard give it back to you first. Same with American Express, Discover, they give it back to you right away, and then, if it's validated, they would actually charge you. Whereas the bank, it's the opposite. I take the money out and then you can dispute it, but I'm not giving it back to you (immediately). There's always the fraud side, that always worries me. Security and a breach, anything of that nature. It's also, I would say, us not moving fast enough to take advantage of this opportunity. I mean, think of $6 trillion in checks – we're just scratching the surface. We don't even have 1% market share. I hate saying that, but it's real. Recommended Reading US businesses cling to paper checks
