With all of the emphasis on electronic forms of payment, one might think that paper payments have gone the way of the Macarena. Not quite. The Federal Reserve in 2004 processed nearly 229 million Treasury checks with a cumulative dollar value of $277 billion. It costs the government 62 cents more per payment to issue a check rather than pay electronically.

The Fed also processes postal money orders for the U.S. Postal Service. Postal money orders are prepaid drafts drawn against the Postal Service’s account with the Treasury. Individuals purchase them with cash and use them as they do checks. The Reserve banks processed 186 million postal money orders in 2003, a decline from 226 million in 1999.

Paper is also dwindling on the collection side. But while only 5 percent of total business and individual tax dollars (or about $76 billion) were paid by check in 2003, that still amounted to more than 11 million checks.