The Evolution of Cracking Down on Checks 

In a move that signals a broader digital transformation across the country, the U.S. government has announced it will no longer issue or accept paper checks for federal payments after September 30, 2025. This decision—part of a larger initiative to modernize financial transactions—marks a significant step in the nationwide effort to eliminate check-related inefficiencies and fraud. 

While this directive applies to federal agencies, it also reflects a larger trend already influencing the private sector, including the Residential Construction and Building Materials Industry. 

A System Under Pressure 

Paper checks have long been a staple of B2B transactions in construction, particularly when it comes to payments between Builders, Contractors, and Suppliers. But issues like delayed mail, rising administrative costs, and limited visibility into payment status have pushed many companies to rethink how they manage accounts payable.  

More concerning is the growing threat of fraud. U.S. banks reported over $688 million in mail-theft-related check fraud in just the first half of 2023. In 2024, FinCEN reported that stolen checks were often chemically washed, counterfeited, or deposited remotely via mobile or ATM, allowing fraudsters to bypass in-person verification entirely. These tactics are especially common among small and mid-sized banks, where the majority of fraud cases are reported. 

Why the Government Is Leading the Shift 

Since the global pandemic, the U.S. Treasury Department has reported a 385% increase in check fraud. In response, the government has decided to phase out paper checks — a move driven by three core goals:  

• Cost savings: Electronic payments are significantly less expensive to process than physical checks. 
• Security: Digital transactions help reduce opportunities for theft, forgery, and fraud. 
• Efficiency: Modern systems allow for faster, more transparent disbursements with fewer errors. 
  

As outlined in a March 2025 fact sheet, all federal agencies are required to use modern payment methods like direct deposit, prepaid debit cards, digital wallets, and real-time payment systems. 

How Hyphen Wallet Helps Construction Stay Ahead 

At Hyphen Solutions, we understand that Construction needs a secure, streamlined way to manage payments—especially as the industry moves away from checks. That’s why we developed Hyphen Wallet; a solution streamlining B2B accounts payable with a single-click – reducing fraud risk, minimize manual workloads, delivering secure, efficient ePayments. 

Here’s how it helps: 

• Eliminates paper checks: Completely removes exposure to check fraud and mail theft. 
• Accelerates payments: Suppliers and Subcontractors get paid faster, with full visibility into payment status and remittance details.  
• Improves security: Encrypted banking data, fraud detection tools, and transaction validation features safeguard sensitive information. 
• Reduces costs: Cuts manual processing time, postage, and check stock expenses. 
• Integrates seamlessly: Works with your existing ERP or Accounting Software for a smooth transition to ePayments.

Learn more about Hyphen Wallet 

Looking Forward 

As the federal government moves to phase out checks entirely, businesses of all sizes are being encouraged—if not required—to evaluate their own payment processes. Those still relying on paper methods risk falling behind, both in terms of compliance and competitiveness. 

By embracing digital payment tools, Builders can future proof their operations, protect themselves from rising fraud, and deliver a better experience for partners and subcontractors. 

The era of the paper check is coming to an end. Is your business prepared for the future? 
Request a demo of Hyphen Wallet to discover how automated payments can safeguard your business and provide peace of mind.  

References 
1. PYMNTS – U.S. Government to Stop Issuing and Accepting Paper Checks (2025) 
2. PYMNTS – FinCEN: Banks Reported $688M in Mail-Theft Related Check Fraud (2024) 
3. White House Fact Sheet – Modernizing Payments to and from America’s Bank Account (2025) 
4. FinCEN – Financial Trend Analysis: Check Fraud (2024) 
5. U.S. Department of the Treasury – Treasury Launches Initiative to End Paper Checks for Federal Payments (2025)