As of September 30, all U.S. federal agencies will be required to stop issuing paper checks in favor of digital disbursements like direct deposit, prepaid cards, and digital wallets. The goals behind this move are clear: reduce fraud, cut costs, and meet evolving consumer expectations.
But for revenue leaders at the local level, especially in smaller cities and rural counties, a simple question arises: Does this approach make sense for us, too?
The Federal Case for Digital Payments Is Strong. But Is It Universally Applicable?
There’s no denying that paper checks can be fraud-prone and inefficient. According to the 2025 AFP Payments Fraud Survey, 63% of organizations experienced check fraud, even as check usage declined. The switch to digital rails such as ACH, FedNow®, and RTP® undoubtedly improves efficiency, resilience, and transparency.
Yet for local government officials, the conversation doesn’t end there. Many are asking: How do we reconcile the efficiency of digital tools with the lived realities of the people we serve — especially those who rely on cash or checks?
Caught in the Middle: Cost Pressures vs. Community Needs
For local finance and revenue teams, it can often feel like they’re being pulled in opposite directions. On one side, there’s increasing pressure to digitize to cut costs, reduce risk, and modernize infrastructure. On the other, there’s the deep and daily understanding of residents who may be unbanked, underbanked, or simply not ready to make the technological leap.
More than 14% of U.S. households are still underbanked, with even higher rates in rural and historically marginalized communities. That raises important questions: What happens when digitization unintentionally excludes the very people local governments aim to serve? How do we prevent progress from turning into a new kind of barrier?
Removing familiar, accessible options like cash or money orders doesn’t just cause inconvenience for these members of the community. It can also directly result in missed or delinquent payments, hurting the individuals as well as the revenue stream local governments depend on to keep services running.
That’s where the local government’s responsibility becomes unique. Unlike private enterprises that can simply “go digital or bust,” their responsibility is to serve everyone, including residents without smartphones, bank accounts, or internet access.
Considering this, perhaps the better question isn’t whether to go fully digital, but rather: What does a responsible, inclusive transition to digital look like?
A Middle Path: Innovation That Meets People Where They Are
There are models that prove it’s possible to do both. Euna Payments, for example, supports omnichannel strategies that let local governments modernize while still offering flexibility. From cashiering systems and 24/7 kiosks to secure online portals, it’s about building payment infrastructure that works for all residents, no matter their level of digital savviness.
Ultimately, success means reimagining revenue operations in a way that:
- Embraces omnichannel payment options so every resident can pay in their preferred format.
- Maintains support for cash and check payments, particularly through kiosks and cashiering for underbanked communities.
- Invests in secure, cloud-based platforms to reduce PCI burden and support real-time reporting.
So… Should Paper Checks Be Phased Out in Local Government?
Possibly. Just not necessarily in the same manner or on the same timeline as the federal government.
The key is to lead with inclusion. Every step toward modernization should expand options, not limit them. And success should be measured not just in dollars saved, but in communities served. Because in local government, modernization isn’t just about moving faster—it’s about moving smarter and more equitably.