Nacha’s Support for Eliminating Paper Checks

Nacha, which manages the ACH payment network, has backed the executive order aimed at eliminating paper checks. The organization highlighted that a policy transition away from checks is feasible without technological constraints. Nacha noted that anyone required to pay the federal government must have a bank account and thus can switch to electronic payments instead. Additionally, Nacha advised Treasury to limit exceptional cases where paper checks continue to be issued.

In fiscal 2024, the Treasury Department processed over 1.86 billion ACH transactions amounting to more than $8.5 trillion in value. In comparison, the federal government distributed approximately 36 million paper checks during the same period. By switching from paper checks to ACH payments, the federal government could have saved around $68 million.

Nacha also suggested that Treasury should expedite ACH credit settlement times to align more closely with private-sector standards.

Zelle’s Offer of Support

Early Warning Services, parent company of Zelle, supported the executive order and emphasized the benefits of transitioning from paper checks. The company argued that moving away from paper checks would enhance the government’s ability to detect improper payments and prevent fraud. Early Warning highlighted that Treasury checks are 16 times more likely than digital payments to be reported as lost or stolen, returned undelivered, or altered.

Zelle has been collaborating with the Treasury since 2021, using its Verify Account solution to help prevent approximately 179,000 improper payments across various government agencies. Since then, more than 99.95% of Zelle transactions have completed without any reported incidents of scam or fraud.

The Bank Policy Institute, The Clearing House Association, and the Consumer Bankers Association also jointly supported the executive order, seeing it as a chance to modernize America’s payment infrastructure, reduce fraud, and improve financial security for taxpayers.