July 14, 2025—In 2004, the Check 21 Act ushered in a new digital era, streamlining the handling of paper checks and greatly enhancing security. Two decades later, modern check processing services are built on even more powerful technology—AI-driven, automated, integrative, and adaptive technology that improves performance, efficiencies, and risk mitigation across collection channels.
In the last decade, technological innovations, such as online banking, mobile apps, and electronic wallets, have significantly contributed to the shift towards digital payments. Digital payments have pulled payment traffic from legacy channels, traditionally characterized by slower processing speeds or funds availability, or other performance limitations compared to today’s faster digital channels. According to the Commercial Checks Collected through the Federal Reserve–Quarterly Data, in 2025:Q1 the Federal Reserve processed 692 million checks, with a total value of $1,959 billion. This compares to 2020:Q1 with 999 million checks with a total value of $1,986 billion, and 2010:Q1 with 1,992 million checks with a total value of $2.302 billion. While check volume has decreased precipitously, the decline in the total value of checks has been gradual.
Alternative digital payment rails will continue to gain strength in the marketplace due to several factors. Some major retailers no longer accept checks, and the U.S. federal government recently announced its plans to phase out paper checks for many of its agency-issued payments. And, neo banks and financial services technology providers have flooded the market with customer-centric alternatives to traditional bank accounts such as P2P payment applications.
There has also been an increase in fraud and theft. Results from the 2025 AFP® Payments Fraud and Control Survey, indicate that 79% of organizations were victims of payments fraud attacks or attempts in 2024. According to the study, checks remain the most frequently targeted payment method for fraud, with 63% of respondents indicating that their organizations experienced check fraud in 2024.
Although decades old itself, the Automated Clearing House remains the backbone of the U.S. interbank payment system and the primary channel for direct deposit. According to Nacha, “the ACH Network began 2025 with impressive gains in both standard and Same Day ACH during the first quarter. ACH payment volume rose 4.2% to 8.5 billion. The value of those payments was $22.1 trillion, up $1.4 trillion, or 6.6%, from a year earlier. Same Day ACH continued its growth trajectory, recording 326 million payments valued at $897 billion. Those represent increases of 19.1% and 24.8% respectively over the same time in 2024.”
Legacy forms of payment may decline but simply don’t disappear when new payment methods become available. Paper checks have a place in the market and will continue to coexist with other payment rails for some time to come. Checks remain a widely used payment method for many for convenience, trust, cost and flexibility. Some consumers, and mid-market and small businesses, continue to rely on paper checks, especially for high value payments. Consumers continue to make a case for paper checks to gift money, pay certain expenses to small entities, make donations, and pay school or local organizations that may not be set up for digital payments.
Checks remain integral to many industries. There has been a slower decline in check use for B2B than B2C. Checks offer traceability and easy cancellation if errors occur. Check payment and remittance information is an engrained part of many business’ financial management practices. Common use cases for businesses include vendor and contractor payments and payroll. If financial institutions are interested in attracting new businesses and retain current clients, they need to offer high performing, secure, and efficient check processing services.
With decades of experience in the payment and money movement business, Vertifi understands that check processing functions remain at the core of your financial institution’s operations. We offer a comprehensive suite of cutting-edge check processing solutions including Image Cash Letter (ICL) processing services which ensures the safe, timely, and efficient transmission of your digital items for clearing, return, and collection. Vertifi’s ATM/ITM File Processing captures your deposit files from across your terminal network for easy processing, greater efficiency, and improved risk management. Our flagship feature-rich Remote Deposit Capture solutions are at the core of our check processing portfolio. DeposZip® Mobile and Desktop RDC are the preferred choice for credit unions, banks and digital banking providers. Utilizing Verfiti’s administrative platform to manage returns and adjustments further simplifies the process.
Reach out to us to learn more about what Vertifi’s solutions can do for you.