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Government stops mailing benefits checks, but that won't slow consumer use

The U.S. government recently made a move to eliminate most of the paper checks federal benefits recipients receive. Instead of the physical checks they are accustomed to, most people collecting government support will now be required to receive their Social Security, veterans benefits and other funds electronically.

New program changes how most receive benefits
The "Go Direct" initiative, which was implemented March 1 calls for benefits to be deposited directly into recipients' bank accounts, rather than physically mailed. Those who are hesitant about the switch can request a U.S. Department of Treasury-issued debit card rather than have the money sent to a checking or savings account. While the government will allow some waivers for those born on or before May 1, 1921, in addition to those who live in rural areas with few local banks. However, it's not likely many will be granted their request to continue receiving paper checks: CBS reported only about 20 percent of those who applied for the waivers actually received them.

The government claims switching to electronic transactions will save money - a major concern since the country is facing a massive federal debt and looking for new ways to cut spending. Other concerns were in regard to security, as those who receive mailed checks could become victims of fraud.

Many could be hesitant
Even though the federal government has touted the advantages of the new program, many benefits recipients could remain skeptical of the plan. Individuals who are accustomed to receiving their paper checks could be confused by the updated requirements, especially seniors who may have relied on the old system for years. According to CBS News, only a little more than half of seniors even own a computer, which could make it impossible for many older individuals to determine if their check was deposited or if something was wrong with the amount they received.

The program could also cause stress for those who don't have bank accounts or prefer to rely solely on cash. Even though beneficiaries without bank accounts have the option to receive a prepaid debit card, they may be hesitant to use it, especially if they frequent cash-only businesses or feel more secure with physical currency or checks in their wallets and homes.

While the government may be eliminating its use of benefits checks​ for the most part, consumers and businesses still rely on them to make payments and purchases. Because this initiative won't halt benefits recipients from writing their own checks once their deposits have been made, organizations will still need the most effective and efficient check scanners available.

May 15, 2013