Dive Brief:

• Early Warning Services, the owner of the Zelle peer-to-peer payments platform, this week put itself in the running to help the federal government eliminate the use of paper checks, a goal set by President Donald Trump early this year.
• The company suggested using Zelle for payments to and from the U.S. Department of the Treasury — which collects tax money and disburses tax refunds — in a letter Monday.
• “We are uniquely positioned to help the Treasury meet its goals under the executive order to modernize federal disbursements, enhance financial inclusion, and reduce improper payments,” the letter said.

Dive Insight:

EWS’s letter was in response to a request for information that the Treasury Department posted May 30 seeking input on its implementation of Trump’s March executive order requiring the federal government to end its use of paper checks by the end of September.

It’s not clear if any other companies have proposed their services to the Treasury and is competing with Early Warning Services to modernize the federal payment system.

A spokesperson for Early Warning Services — which is owned by seven big banks — said the company is unaware of anyone else submitting a similar letter to the Treasury Department. 

The deadline to provide information on the government’s move to end paper checks was the end of the day on Monday and nearly 200 comments have been posted to the federal docket for receiving comments in response to the U.S. request for information.

A Treasury Department spokesperson did not respond to a request for comment Monday.

Paper checks come with unnecessary costs, delays, and run the risk of fraud and theft, Trump's executive order said.

But critics of the plan may note consumers without bank accounts could be negatively impacted by the end of paper check use.

In its letter on Monday, Early Warning Services proposed a pilot study to determine how many recipients of payments from the Treasury are truly unbanked.

Zelle has been the subject of hearings and Congressional investigations on the proliferation of fraud throughout its payments platform. But a company spokesperson said in a news release on Monday that “99.95% of all Zelle transactions are completed without any report of scam or fraud.”

The platform has about 151 million enrolled users, a figure that includes consumers and small businesses, the company said in a February news release.

An EWS spokesperson declined to provide more information on the timeline. The Treasury's request for information said that the government expects to stop making federal payments by paper check and shift to electronic payments beginning Sept. 30.