Germany is bidding farewell to the paper check. Once a staple of everyday payments, checks are now all but obsolete, and the government plans to eliminate them completely by the end of 2027—a glimpse of a check-free world that’s unfolding in the U.S.
A report from the Library of Congress underscores just how far Germany has come: checks now account for a mere 0.01% of cashless payments. As recently as 2007, more than 75 million checks were processed annually; by 2024, that figure fell to 2 million.
In response to this steep decline, the Bundesbank, Germany’s central bank, has announced it would switch off the technical infrastructure for automated interbank check processing, reserving checks only for rare, exceptional cases.
Alternative Payment Methods
What caused the demise of paper checks? It wasn’t credit cards, which have never been especially popular in Germany. According to Statista, Germany had just 6.58 million credit cards in circulation in 2023, compared with 143 million debit cards.
Cash usage also remains popular in Germany, although it too has been declining. In 2008, the Bundesbank found that cash was used in 82.5% of all transactions. By 2023 that share had fallen to around half of all payments.
Instead, the Bundesbank attributes the shift to the increasing use of alternative payment methods—chiefly SEPA (Single Euro Payments Area) real-time transfers. In 2024, about 335 million SEPA instant transfers were made in Germany. At the same time the German government is busy dismantling the check-processing apparatus, it has become mandatory for payment service providers in the EU to offer SEPA instant transfers.
As in the U.S., government services in Germany have also moved away from issuing paper checks. Germany’s Federal Employment Agency recently introduced prepaid SocialCards to pay benefits to citizens without a bank account, replacing previously issued government checks.
Similar Moves in the U.S.
The U.S. may be looking to Germany as a model as it transitions away from paper checks. From 2015 to 2024, check payments dropped from 6% to 2.5% of consumer transactions, according to the Atlanta Fed.
That decline preceded the federal government’s decision—effective September 30—to stop issuing checks for tax refunds and other payments, a move that will only accelerate their disappearance. Some government agencies, such as FEMA, have already begun issuing payments through alternative rails like FedNow.
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