US Treasury prepares to retire cheques

US Treasury prepares to retire cheques

The US Treasury is embarking on a publicity campaign ahead of its upcoming move to switch off paper cheques as a payment method for social security and other federal benefits in favour of electronic methods.

Beginning on 1 May, anyone newly applying for Social Security or other federal benefits will need to choose an electronic payment method. People currently receiving their federal benefits by cheque will have to switch to direct deposit by 1 March, 2013.

The Treasury says electronic payments now make up over three-quarters of all noncash transactions in the US and there were 5.7 billion fewer cheques written in 2009 than in 2006, a decline of 6.1 per cent per year.

Approximately eight in 10 already receive their Social Security or other federal benefit payment electronically.

Speaking at an event where she ceremonially 'signed' a $1 billion cheque to taxpayers, Treasurer Rosie Rios, said: "It costs 92 cents more to issue a payment by paper check than by direct deposit. We are retiring the Social Security paper check option in favor of electronic payments because it is the right thing to do for benefit recipients and American taxpayers alike."

The Treasury has set up a Web site for its 'Go Direct' initiative and is also using YouTube and Twitter to spread the message.

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