Government Benefit Checks Bite the Dust: The Move to Digital Payment

On May 1, new beneficiaries of government benefits such as social security will be required to receive payments digitally, and by 2013 all current beneficiaries will have made the switch. The paper check is well on its way to becoming an obsolete technology for moving money from government to citizens.

While many have already abandoned paper checks, opting for direct deposit or the newer technology of prepaid debit, nine million Americans still receive a monthly benefit check.

This transition creates new opportunities for financial service arrangements but comes at a time when the future of those services is uncertain. A new paper by Hudson Visiting Fellow Hanns Kuttner provides an overview of the issues and lays out features of potential scenarios for how the transition will unfold.

Further Reading

Hanns Kuttner, The Move to Digital Payment, Hudson Institute, February 2011