Thread by @patio11

Me: Ah a nice relaxing Monday where I can finally get some work done.
DOGE: Have you ever heard of checks?!
Me: %{*]% it.

Me: I don’t do partisan politics.
Twitter the Sumerian bird demon: Got it.
Me: Which is why I work in a painfully boring infrastructural field.
Twitter: Oh sure.
Me: That no one hates each other over.
Twitter: Yeah.
Me: So just writing the truth won’t summon a mob.
*curse starts*

Why does the government send a lot of checks? Principally because it is the easiest payment method in the U.S. to coordinate over multi-year timescales without needing to constantly re-coordinate updates with the payee on how they get their money these days.

Also allows them to push complexity out of the payments process and into a combination of financial sector and USPS.

Ever made a transaction workflow for failed payments due to account no longer existing? Not fun; needs an ops team.

If you send a check to me as of the last apartment we lived at, though? From your perspective, payment never failed or was redirected. USPS got it to me in the ordinary course of forwarding mail. Free X0% reduction in ops work at cost of zero dollars and zero cents.

Checks allow you to payments without needing to pre-coordinate with counterparty, given you know their name and address. Did someone overpay taxes, a fee, etc? Sending a settlement? Whatever the reason, pop a check in the mail. They’ll figure it out pretty quickly.

Many payments are received by people who are at socioeconomic margins. We’ve made tremendous progress on getting them electronic payments, but last few percent is… tricky.

Negotiability of checks solves for much of this, including unbanked users.

Check payments move identity and authorization management from the payer to someone local to the payee (usually, the bank), which may correct for a variety of edge cases that you will otherwise need a payment ops team to handle.

For example, many recipients of benefits have trusted people in their lives. Many have other-than-trusted people in their lives. How do you tell the difference? You don’t, most of the time. You leave it to the bank.

Of course Ms. Mildred signs her checks over to Cindy. That’s her daughter. Everyone in town knows Cindy. Moved back in to help out.

Excuse me sir you’re depositing a benefits check for who exactly? What’s the nature of your relationship with him? Can I see some paperwork please?

(One of value propositions for the community banking sector is that branch is a local retail point of presence for many government agencies simultaneously in a physical place where that POP would be inefficiently expensive. Here we get the private sector to happily pay for it.)

Checks are a robust honey badger.

Did you lose your bank account over a credit dispute two weeks ago? Incoming electronic payments bounce back; incoming checks don’t care. Change banks because you broke up? Checks don’t care. Lost your password? Checks don’t care.

Acrimonious dispute between the owners of a small business selling to the federal government? First pass dispute resolution: let the bank deal with that nonsense. Backstop to courts or payer available but cofounder issues not something you want to be in middle of.

Do you love the experience of working with government IT contractors? Do you love the experience of having every department and program reinvent the payments wheel? Tremendous fun!

Or just send a check; it is the same UI and API every single time.

Electronic payments are wonderful! You know what you can do when they fail? That’s right: send a check in the mail!

DOGE notes that the federal government pays money when it receives check payments. Entire dollars per payment, to maintain lockboxes.

Now I don’t want to make this awkward for anyone but if you look at a payments industry pricing chart, take a gander what you can buy for ~$2.

That is a very serious point, because we usually externalize that cost for credit card payments onto taxpayers/fee payers/etc. Take a look at options at your local taxing agency.

It’s no less of a tax just because it leaks to a contractor rather than hitting Treasury first.

For people who don’t know those numbers off the top of their head, a representative example:

Checks do get intercepted. Checks do get lost. Checks do generate exceptions. When you multiply these over extremely large numbers of payments, you will get seemingly silly numbers. Nature of the game.

Electronic payments do get intercepted. Electronic payments…

A few more words here:

Businesses pay for e.g. cards because they:
* want fast access to funds
* want to swiftly confirm payment to release services
* want a cheap dispute resolution service

The government:
* has ~infinite credit
* mostly redistributes
* knows where you live

What happens when user preferences in payments change? For example, what if a large portion of young Americans decide that banks are boring and they would prefer to send and receive payments on their mobile phones? Do we ask every government agency to update in response to this?

No, a PM at Cash App or Venmo or similar figures out the check integration in about one tenth the time it would take a single federal agency to go through an RFP process, and then they get a nice big bonus, at no cost to the taxpayer.