The federal government plans to stop issuing paper checks by September 30, instead opting for direct deposits, prepaid cards, or other digital payment methods. The Social Security Administration is currently advising beneficiaries about these upcoming changes.
Who Will Still Receive Paper Checks?
This shift will mainly impact a small number of beneficiaries who haven’t adopted electronic payments yet. According to the Social Security Bureau, less than 1% of beneficiaries currently receive paper checks.
Last year, around 512,690 Americans, or 0.8% of over 68 million recipients, were still getting Social Security benefit checks. Most—about 67.8 million—receive their benefits through direct deposit.
It’s worth noting that the number of paper checks from the IRS isn’t substantial. Most individual federal tax refunds are issued via direct deposit. In 2025, for instance, about 87 million out of nearly 94 million taxpayer refunds were direct deposits.
Why Move to Electronic Payments?
The decision to phase out paper checks is driven by issues like cost, delays, fraud risks, and inefficiencies. Historically, the Treasury Department notes that checks are 16 times more likely to be reported as lost, stolen, or altered compared to electronic funds transfers (EFTs).
Notably, earlier this year, there were reports of envelopes containing U.S. Treasury checks being stolen for resale online.
There’s also a significant cost to maintaining the infrastructure for paper records—estimated at over $657 million in 2024 alone. The agency emphasizes that EFTs are processed faster than checks, ensuring timely payments. While issuing a paper check costs about 50 cents, EFT costs are under 15 cents.
How Can Beneficiaries Switch?
The Social Security Administration is notifying recipients still on paper checks about the upcoming changes and the advantages of switching to electronic payments. All benefit checks come with inserts detailing how to transition to electronic options.
Payment Options
Beneficiaries currently on paper checks can switch to receiving Social Security payments via direct deposit or prepaid cards. With direct deposits, funds can go directly into checking or savings accounts. Those with an existing Social Security or SSI benefit and a bank account can sign up for this option anytime before the transition. Beneficiaries can change their deposit information online or by calling Social Security.
The Direct Express card offers a prepaid debit option for those without bank accounts. Interested individuals can register by contacting the U.S. Department of the Treasury.
Who Gets Left Behind?
Regarding banking access, the Federal Deposit Insurance Corporation (FDIC) classifies households without any checking or savings account as unbanked. In 2023, about 4.2% of U.S. households were in this situation, typically skewed towards low-income and minority groups.
Additionally, elderly individuals and those with disabilities represent a significant portion of those still reliant on paper checks. The Social Security Administration had already made efforts to encourage electronic services before this announcement.
Exceptions to the Rule
Some exceptions may apply, including individuals without access to banking or electronic payment systems or specific emergency payments. Those seeking an exemption can contact the Treasury.
Electronic Payments for Federal Receipts
The order also covers receipts, meaning payments made to the federal government—like taxes—must be electronic as well. Various federal agencies have been directed to quickly transition to electronic payment requirements.
IRS Transition
The IRS is also advocating for taxpayers to utilize direct deposit, claiming it’s the fastest way to receive refunds. For those without bank accounts, prepaid debit cards may be an alternative option for direct deposit. Some payment apps can also facilitate direct deposits.
It appears that U.S. citizens living abroad may have some limitations with direct deposits for federal income tax refunds, unlike the Social Security Administration, which offers a bit more flexibility for international beneficiaries.
