The US Treasury is gearing up to phase out the
cheque and switch to e-payments over the next ten years to cut
administration and processing costs.
In a blog post, Treasurer of the US Rosie Rios
explains that beginning 1 May 2011 anyone newly applying for Social
Security, Veterans Affairs or other federal benefits will need to
choose an electronic payment method, including direct deposit or a
prepaid debit card.
Go deeper with GlobalData
People currently receiving their federal
benefits by paper cheques must switch to an electronic payment
method by 1 March 2013.
“More than 18m baby boomers are expected to
reach retirement age during the next five years, with 10,000 people
a day becoming eligible for Social Security benefits,” said
Rios.
“It costs 92 cents more to issue a payment by
paper cheque than by direct deposit. That’s why this initiative
will produce significant savings for taxpayers.”
Rios wrote a symbolic $1bn cheque to US
taxpayers to highlight the sum they will save over the next years
as the Treasury makes the switch to e-payments.
