Chase Urges Customers to Switch to Direct Deposit Before Deadline
Chase has announced a call for its customers who receive paper checks from the government to transition to direct deposit ahead of the U.S. Treasury’s deadline on September 30, 2023. This deadline marks the end of paper checks for most federal payments, a change aimed at streamlining government disbursements and enhancing security.
In a press release issued on August 27, the bank outlined several steps for customers to enroll in direct deposit. Individuals can contact the federal agency that pays their benefits, visit GoDirect.gov, or reach out to the Electronic Payment Solution Center at 800-967-6857. Chase also encourages customers to visit their local branches for assistance during this transition period.
Steve Goodman, head of product for Chase Consumer Bank, emphasized the advantages of direct deposit, stating, “Direct deposit is not only a more secure option, but it also ensures that our customers receive their payments promptly without the risk of theft or delays sometimes associated with paper checks.” He reiterated the bank’s commitment to providing resources and support for customers to facilitate this change smoothly.
The U.S. Treasury had previously highlighted the impending phaseout of paper checks in a press release dated August 14. The Treasury stated, “It’s time to switch to an electronic payment method.” In addition to the options provided by Chase, the Treasury directed those without bank accounts to resources such as FDIC: GetBanked or MyCreditUnion.gov. Individuals can also obtain a Direct Express Debit Mastercard, which allows them to receive federal payments electronically.
Treasury Secretary Scott Bessent commented on the initiative, saying, “Reducing paper checks has been a longstanding bipartisan goal that our administration is finally putting into action.” He noted that this transition would help mitigate fraud and theft while eliminating delays that can hinder timely payments to Americans.
The move to end paper checks was formalized by an executive order signed by President Donald Trump on March 25, 2023. The order mandates that the federal government cease issuing paper checks for disbursements effective September 30, while also stopping the acceptance of checks for payments “as soon as practicable.” The objective is to enhance operational efficiency by shifting all federal disbursements and receipts to electronic means, although it does not imply the establishment of a Central Bank Digital Currency.
Research by PYMNTS and Ingo Payments revealed that around half of the surveyed individuals had received at least one government disbursement in the past year. Another collaboration noted that 90% of Americans would prefer receiving disbursements instantly if given the option. The shift away from paper checks is expected to address this demand for more immediate payment methods.
As the deadline approaches, Chase and the U.S. Treasury are working to ensure that all recipients of federal payments are informed and prepared for the transition to electronic payments. The initiative represents a significant step towards modernizing government payment methods, aligning with broader trends in financial technology and consumer preferences.
