ELECTRONIC CHECKS

Americans have become more and more at ease with electronic banking services. The use of credit cards is at an all-time high, and many consumers use bank debit cards more often than they write checks. Millions of the nation's workers never receive a paycheck. Instead, their "checks" are deposited electronically into their accounts every payday.

As computerized transactions become the norm, government looks for ways to take advantage of this streamlined process. Social Security recipients have had the option of getting their monthly checks by direct deposit for quite some time. This means the funds arrive in bank accounts automatically, ending the need to rely on sometimes spotty mail delivery or the need to go to the bank to deposit the check.

Food stamps will soon be converted to plastic debit cards in Missouri and elsewhere around the nation. The switch is an effort to reduce fraud and to lower the cost of issuing and accounting for food-stamp usage.

Now Missouri's state treasurer, Bob Holden, wants to move another step further. His goal is to eliminate the writing of paper checks and to go entirely to direct deposit of all funds paid out by the state. This includes welfare payments, unemployment benefits, veterans benefits, state pension payments, state payroll checks and many other forms of state payments.

Right now the state treasurer's office issues some 450,000 checks each month, including some 30,000 payroll deposits that are made electronically -- only half of the state's monthly payroll. The treasurer's office is the first in the state to have 100 percent participation by its employees in the direct-deposit payroll program.

Holden estimates savings of more than $300,000 a year by using electronic fund transfers rather than writing checks. He also thinks it will reduce fraud and help some Missourians who don't have checking accounts to learn about banking services.

The state treasurer's projections may be on the optimistic side, but it is fairly clear that technology's effect on basic financial transactions is being felt at every level of society. If Holden's efforts can save tax dollars, it is worth a try.