Early Warning Submits Comments on the Future of Fed’s Check Services

Company advocates for a phased, transparent drawdown of paper checks while encouraging thoughtful adoption of digital payments
 

WASHINGTON — Early Warning Services, LLC, today submitted a comment letter responding to the Federal Reserve Board’s Request for Information on the future of its check services, urging a measured transition that preserves nationwide stability while also supporting a shift to digital payment alternatives.

“Paper checks are declining, but check fraud remains a persistent and costly challenge,” said Ben Chance, General Manager of Early Warning’s Identity and Payments Risk business. “The path forward should be a responsible transition that maintains operational stability and strong fraud protections in the near term while steadily expanding access to reliable digital payment options.”

Although usage continues to fall, checks remain embedded in certain business workflows and among consumers facing barriers to digital adoption. At the same time, check fraud has increased in recent years, creating growing operational and consumer risk across the financial system. These dynamics underscore the importance of preserving reliability and resiliency during any transition.

In its letter, Early Warning emphasized that the Federal Reserve plays a unique role in providing nationwide reach, predictable settlement, and system-wide coordination. Any modernization effort should avoid abrupt changes that could shift costs, increase disputes, or disproportionately impact community banks, credit unions, small businesses, and underserved populations.

Specifically, Early Warning recommends the Federal Reserve:

• Avoid degrading reliability while implementing strategies to maintain core nationwide consistency during any transition from checks to electronic payment alternatives.
• Encourage adoption of reliable and cost-effective electronic alternatives, including tokenized electronic payments (such as Zelle® and ACH).
• Adopt a phased simplification plan with clear milestones, ample notice and feedback opportunities, minimum baseline service levels, and risk-based monitoring.  
• Coordinate and partner with industry on standards for exceptions, returns, and operational data to reduce consumer friction.
• Pair operational changes with a migration enablement roadmap that supports small banks, small businesses, and vulnerable communities.

Digital payment networks already demonstrate the ability to move funds reliably and efficiently at scale. Early Warning operates Zelle®, which is offered through more than 2,300 financial institutions and facilitated more than $1.2 trillion in payments across 4.2 billion transactions in 2025. The company also delivers fraud prevention and risk solutions that help financial institutions and government agencies detect and prevent criminal financial activity, including counterfeit information and washed or altered checks.

An orderly, coordinated transition – grounded in reliability, fraud mitigation and access – will be essential to ensuring that the Federal Reserve’s migration from paper checks to digital alternatives strengthens confidence in the U.S. payments system.
 

About Early Warning

Early Warning Services, LLC, helps power payments innovation across the United States banking sector – enabling financial inclusion, advancing reliable and fast payments for America’s consumers and small businesses, and helping banks and credit unions protect the people and businesses they serve. For more than 35 years, Early Warning has worked with banks, credit unions, businesses, and government agencies to help drive prosperity, deliver bold innovation and improve how payments are made. For more information, visit www.earlywarning.com.