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Payments
6 min

Paper Checks Are Disappearing: What SMBs Should Do Now

Discover why paper checks are fading and how your business can switch to digital payments.

Published at | Updated:
A small business owner writing checks to pay vendors in her living room.

Key takeaways

  • Cut the hidden costs of paper checks, which can run from $4 to $20 each every time you pay a vendor.
  • Recognize the trend, as the US government stopped issuing paper checks for most federal payments on September 30, 2025.
  • Protect your business from fraud by keeping your bank account and routing numbers off checks sent through the mail.
  • Switch to Melio to schedule payments, send ACH transfers, and let us print and mail checks for stubborn vendors.

Who still uses paper checks, anyway?

Businesses still use paper checks the most, even as consumers move on. Most people rarely write personal checks anymore, and even paying rent by check is in steep decline.

So why are we still talking about checks? Because companies remain the biggest check users. In 2025, 26% of organizations’ B2B payments were still made by check, down from 33% in 2022, according to the 2025 AFP Digital Payments Survey. Most US businesses still use them to pay other organizations.

If you’re wondering why, we’ve been asking ourselves the same question. Maybe the appeal lies in their familiarity, making checks feel like a safer option. They’re not, but more on that later.

It could also be that humans tend to hang on to physical objects that feel more tangible. Whatever the reason, it’s time to reconsider this practice.

The US is now ending paper checks, too

Yes, the US is ending paper checks, too. Under Executive Order 14247, the federal government stopped issuing paper checks for most federal payments on September 30, 2025, and shifted those payments to electronic methods.

That change covers things like tax refunds and benefit payments. For business owners, it’s a clear signal that checks are on their way out here, too.

The US is now moving in the same direction as Australia, which plans to wind down its cheque system by the end of the decade. If the government is leaving checks behind, it’s a good moment for your business to do the same.

The problems with checks

If you still think paper checks are your friends, here are five reasons to think again.

Price

A lot of people forget that checks come with extra costs for both the payor and the recipient. The hidden costs add up quickly:

  • Bank processing fees
  • The physical checkbook
  • Postage
  • Staff time to write and mail each check

Together, these easily add up to between $4 and $20 a pop.

Even if you’re sending out just seven checks a month, that can mean hidden spending of up to $1,680 a year. That’s a lot of money to spend just to pay the bills.

Carbon footprint

The paper used to print your checks and make your envelopes may come from trees, but it doesn’t grow on them. On top of its financial cost, its production is a burden on the environment.

Mailing the check or using a courier means burning gas to move it from place to place, which further increases the damage.

Surprises

When you send out a check, it takes a long time to arrive and get processed. It can be days or weeks, and you never really know.

The trouble is that a lot can happen during that unpredictable window. If you aren’t paying close attention to your bank balance, your check might bounce or drain your account at the wrong time, depleting your cash flow.

Safety

Did you know that all an attacker needs to commit ACH payment fraud is your bank account number and routing number?

And what’s printed right on every one of your checks? You guessed it, that exact information. So why hand it out so easily, or worse, let it roam unattended across the country in an envelope?

The disappearing act

Physical objects have a weird tendency to go poof. Whether they’re lost or stolen, it’s never good news when it comes to financial instruments like checks.

While missing checks can be replaced, it’s a hassle and comes at an extra cost. The delays can also lead to late penalties, damaged vendor relationships, and in some cases, even litigation.

What’s the alternative?

The alternative is digital payments, of course. Using an online payment platform like Melio to manage your accounts payable (AP), you can:

  • Schedule payments in advance
  • Send ACH bank transfers
  • Use a credit card to preserve your cash flow without affecting how your vendor gets paid
  • Pay international vendors
  • Send business payments on the go through the mobile app
  • Track all your business payments from one place

What if my vendor won’t hear of it?

If your vendor isn’t sold on digital payment methods and insists on a check, that doesn’t mean you need to go back in time and write one. You can use Melio just the same and choose the payment method that works for you. We’ll print and mail the check on your behalf.

On top of time and hassle, this saves you money, too. You can even combine several bills from the same vendor and pay with a single check to save even more.

Never write another check again

Instead of wishing you lived in Australia, the next time a vendor asks you for a check, have Melio write it for you. We’ll even put it in an envelope with a stamp and everything so you don’t have to worry about it.

Sign up for Melio today to shift to digital payments and leave paper checks behind. We promise you won’t miss them.

Paper checks FAQs

Are paper checks being phased out?

Yes, in many places. The US federal government stopped issuing paper checks for most federal payments in September 2025, and Australia plans to wind down its cheque system by the end of the decade.

Will the IRS issue paper checks in 2026?

Most tax refunds are now sent electronically rather than by paper check. You may need direct deposit details on file to get paid without delay.

Can you still order paper checks?

Yes, you can still order checks through your bank or credit union. Fewer businesses rely on them, though, as digital payments take over.

*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.

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