Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I just learned it, and I thought I would share
it with you because I have a feeling if I
just learned it, maybe some of you will also just
be learning it.
Speaker 2 (00:07):
And that is that.
Speaker 1 (00:08):
Coming up in September of this year, a new federal
rule will take effect where for almost everybody in the
United States, you will not be able to send money
to or receive money from the federal government by use
of paper check, even for your taxes or tax refunds.
(00:31):
A lot of us are used to checks for that
no more. For almost everybody joining us to talk about
what this means, how we're all going to deal with it,
why it's happening. Houston Frost is chief product officer for
UCO USIO and they are an embedded payment solutions company. Actually, Houston,
am I supposed to say UCO or USIO.
Speaker 3 (00:53):
Ross UCO is exactly right. So you did it, You
did it right, You.
Speaker 2 (00:58):
Got it right the first time.
Speaker 1 (00:59):
You know what, just, at the risk of free advertising,
give me nineteen seconds on what UCO does because embedded
payment solutions. I think I understand what that means, but
I'm not actually sure.
Speaker 3 (01:11):
Yeah, that's that's great. No, So we serve businesses nonprofits.
Speaker 4 (01:16):
And government into these local government, state government with a
variety of payment services, so that may include ach services
that could be sending out electronic payments via AH or
accepting you know e.
Speaker 3 (01:29):
Check payments.
Speaker 4 (01:30):
We do debit credit card acceptance, and we also do
prepaid debit card issuing.
Speaker 3 (01:36):
Believe it or not.
Speaker 4 (01:37):
We also offer print in mail services, and we still
print and mail a lot of paper checks.
Speaker 1 (01:42):
So let's talk about what the federal government is doing
here and why. So first, just very quickly tell us
who will be the very very few people that may
still interact financially with the federal government with a pay
per check once this is in place.
Speaker 4 (02:00):
Well, Ross, you hit the nail on the head. It's
largely going to be individuals that are receiving checks or
sending checks in to the irs.
Speaker 1 (02:10):
So you know, taxpayers, right, But my understanding was for
for most taxpayers, you won't be allowed to send a check.
I think like it's only people who are homeless or
close to weeds, who who don't have access to a
bank account, cannot get a bank account that will be
able to use checks right, receive a check. You obviously,
(02:31):
if you have a bank account, you won't write a check.
But theoretically you could receive a check from the federal
government un if you don't have a bank account and
find something to do with it.
Speaker 4 (02:38):
There will be very very few exceptions moving forward for
the IRS payments, and so it's going to.
Speaker 3 (02:46):
Look a lot.
Speaker 4 (02:46):
It's going to look very similar to Social Security benefits
yes today, as well as THEA benefits look today, which
are now at ninety nine percent plus electronic payments. So
if you look at the IRS, they're still at a
round ten to twelve percent of refunds for example, being
sent by check right, And even though it's a small percentage,
(03:07):
that's millions of millions and millions of checks in you know,
a country this size.
Speaker 2 (03:12):
So what's the reason for this.
Speaker 4 (03:15):
Well, the government says the reason for it is that
it's going to save money. So I think that's sort
of your primary reason. Is it costs money to one
receive any paper checks from individuals, to process those checks,
and then also to print and mail those checks.
Speaker 3 (03:34):
So moving to an electronic.
Speaker 4 (03:35):
Means would save us money on an ongoing basis. You know,
part of that also could be to reduce fraud. Now
you're not going to completely eliminate fraud. By moving away
from paper checks, you're going to end up with some
different types of fraud. You can have fraud on electronic means.
But that's another reason that the government is giving to
(03:56):
want to eliminate paper checks.
Speaker 1 (03:59):
It's always seem to me that you would only have
to be modestly clever to do paper check fraud. You know,
is is that a big thing these days? Is payper
check fraud a big thing?
Speaker 4 (04:13):
I mean, you still see it, and uh, you know,
with a government check it's a little more difficult. They
do print on very specific paper, for example. But uh,
you know, you still absolutely have you know, active check
fraud occurring. There were, you know, thousands of incidents reported
(04:34):
to the SEC. Losses over you know, a few million
dollars in last year, and a lot of times you
don't you don't see this happening, usually at a bank,
but you'll get a check and then you go to
a check cashing type facility, and that's how you can
defraud those individuals by by forging a check and getting
(04:54):
them to cash that check on the stock.
Speaker 1 (04:56):
If you were in the room where they were discussing
all this and you were red teaming it in other
words they said.
Speaker 2 (05:03):
They said, hey, Houston, I want you to give.
Speaker 1 (05:04):
Us the best arguments against making everybody do everything electronically.
What would be the one or two best arguments against it,
even if they wouldn't have ventured, even if you still
think it's a good idea on balance, well.
Speaker 4 (05:17):
I mean, I think there might be a couple arguments
against it. You know, first of all, let's take a
little bit of a step back in time. You know,
the reason why the Social Security benefits and VA benefits
today are ninety nine percent plus electronic is that that
was actually an initiative that started almost thirty years ago
by Congress. I guess back when they you know, did
(05:38):
stuff in nineteen ninety six, and it was a Debt
Collection Improvement Act. And so what you're seeing there is,
you know, the Treasury didn't put a deadline until twenty ten,
and that deadline was twenty thirteen. But you know, twenty
some odd years and you still have one percent or
so of recipients that meet that are accepted. They need
(05:58):
payper checks for one reason or another, the elderly, special
needs individuals, et cetera. So you know, even if we
get this done as fast as the Executive Order is
requiring us. We know we're still going to have some
percentage that are going to be exempted, so we're not
going to necessarily get to zero. And we haven't seen
our ability to get to zero even over thirty years
(06:19):
in the past. So you ask yourself how much money
will we actually save? Can we get rid of all
the check printing equipment entirely?
Speaker 3 (06:28):
And we may not be able to.
Speaker 4 (06:30):
So one possible argument against it is are we going
to spend more money on this initiative than we're going to? Say?
Speaker 2 (06:37):
All right, let's see.
Speaker 1 (06:39):
Let me just interject you here because we've only got
about a minute and I have a few listener questions
I want to ask you, So give me, you know,
as quick an answer as you can. On some of
these with ach payments going to the federal government, would
I expect there to be a fee?
Speaker 4 (06:55):
No, you should not expect a fee for ahe payments
sent to the federal government.
Speaker 2 (07:00):
When will this start? I think it's late September, right.
Speaker 4 (07:04):
September thirtieth, is you know, when the Executive Orders has
stated the I R S and other departments need to
have this in effects by you know, we'll see I
guess coming up what the exemptions will be if they're
you know, how easy it might be to you know,
wiggle out of this requirement if you're kind to get
(07:25):
out of this requirement at that time. So this will
apply to really any kind of payment, like not just
your full ten forty payment, but core estimated quarterly taxes
and really anything you can think of with the I
R S and and much of the rest of the government. Right,
that's right, So any payments you make to the I
r S and then any refunds that you get.
Speaker 1 (07:45):
Back from the edde okay, and the last one. And
I think this question is going to come up a lot,
but give me as quick an answer as you can.
But will the IRS be able to automatically take money
from my account?
Speaker 2 (07:56):
That concerns me.
Speaker 4 (07:57):
Well, today the I r S does not automatically debit
any accounts, so that is not something that they do today.
I you know, couldn't project or predict the future. It
seems like they would not be able to do that
unless you gave.
Speaker 3 (08:13):
Them explicit authority.
Speaker 4 (08:15):
To make that debit. But but you know, as of today,
that's that's the only way you can have your account
debited is when you give them the explicit authority to
make that debit. There are not automatic debits that are
occurring by the I R S.
Speaker 2 (08:31):
Okay, I lied when I said that'll be the last one.
Speaker 1 (08:33):
One more for for somebody who is old school, used
to doing this on paper.
Speaker 2 (08:37):
Maybe used to writing a check.
Speaker 1 (08:38):
What's the best way for folks like that to learn
how to comply with this, whether it's for them personally
or maybe even for businesses.
Speaker 4 (08:46):
Uh, ask your tax accountant would be probably your number
one way, and then you can do your own research.
The I R s will be sending out notices, I'm sure,
posting notices on ways to comply and what.
Speaker 3 (09:00):
They're going to do.
Speaker 4 (09:01):
You know, if you're currently receiving a paper check, but uh,
but but you know you should you should learn about
it online or through these notices. But always ask your
tax accounts.
Speaker 1 (09:10):
Houston Frost is chief product officer for uc O. They're
an embedded payment solutions company. H U s i O
dot com is the link. Thanks for your time, Houston,
great and informative conversation.
Speaker 2 (09:21):
Appreciate it.
Speaker 3 (09:23):
Thank you so much.
Speaker 4 (09:24):
Ross
I just learned it, and I thought I would share
it with you because I have a feeling if I
just learned it, maybe some of you will also just
be learning it.
Speaker 2 (00:07):
And that is that.
Speaker 1 (00:08):
Coming up in September of this year, a new federal
rule will take effect where for almost everybody in the
United States, you will not be able to send money
to or receive money from the federal government by use
of paper check, even for your taxes or tax refunds.
(00:31):
A lot of us are used to checks for that
no more. For almost everybody joining us to talk about
what this means, how we're all going to deal with it,
why it's happening. Houston Frost is chief product officer for
UCO USIO and they are an embedded payment solutions company. Actually, Houston,
am I supposed to say UCO or USIO.
Speaker 3 (00:53):
Ross UCO is exactly right. So you did it, You
did it right, You.
Speaker 2 (00:58):
Got it right the first time.
Speaker 1 (00:59):
You know what, just, at the risk of free advertising,
give me nineteen seconds on what UCO does because embedded
payment solutions. I think I understand what that means, but
I'm not actually sure.
Speaker 3 (01:11):
Yeah, that's that's great. No, So we serve businesses nonprofits.
Speaker 4 (01:16):
And government into these local government, state government with a
variety of payment services, so that may include ach services
that could be sending out electronic payments via AH or
accepting you know e.
Speaker 3 (01:29):
Check payments.
Speaker 4 (01:30):
We do debit credit card acceptance, and we also do
prepaid debit card issuing.
Speaker 3 (01:36):
Believe it or not.
Speaker 4 (01:37):
We also offer print in mail services, and we still
print and mail a lot of paper checks.
Speaker 1 (01:42):
So let's talk about what the federal government is doing
here and why. So first, just very quickly tell us
who will be the very very few people that may
still interact financially with the federal government with a pay
per check once this is in place.
Speaker 4 (02:00):
Well, Ross, you hit the nail on the head. It's
largely going to be individuals that are receiving checks or
sending checks in to the irs.
Speaker 1 (02:10):
So you know, taxpayers, right, But my understanding was for
for most taxpayers, you won't be allowed to send a check.
I think like it's only people who are homeless or
close to weeds, who who don't have access to a
bank account, cannot get a bank account that will be
able to use checks right, receive a check. You obviously,
(02:31):
if you have a bank account, you won't write a check.
But theoretically you could receive a check from the federal
government un if you don't have a bank account and
find something to do with it.
Speaker 4 (02:38):
There will be very very few exceptions moving forward for
the IRS payments, and so it's going to.
Speaker 3 (02:46):
Look a lot.
Speaker 4 (02:46):
It's going to look very similar to Social Security benefits
yes today, as well as THEA benefits look today, which
are now at ninety nine percent plus electronic payments. So
if you look at the IRS, they're still at a
round ten to twelve percent of refunds for example, being
sent by check right, And even though it's a small percentage,
(03:07):
that's millions of millions and millions of checks in you know,
a country this size.
Speaker 2 (03:12):
So what's the reason for this.
Speaker 4 (03:15):
Well, the government says the reason for it is that
it's going to save money. So I think that's sort
of your primary reason. Is it costs money to one
receive any paper checks from individuals, to process those checks,
and then also to print and mail those checks.
Speaker 3 (03:34):
So moving to an electronic.
Speaker 4 (03:35):
Means would save us money on an ongoing basis. You know,
part of that also could be to reduce fraud. Now
you're not going to completely eliminate fraud. By moving away
from paper checks, you're going to end up with some
different types of fraud. You can have fraud on electronic means.
But that's another reason that the government is giving to
(03:56):
want to eliminate paper checks.
Speaker 1 (03:59):
It's always seem to me that you would only have
to be modestly clever to do paper check fraud. You know,
is is that a big thing these days? Is payper
check fraud a big thing?
Speaker 4 (04:13):
I mean, you still see it, and uh, you know,
with a government check it's a little more difficult. They
do print on very specific paper, for example. But uh,
you know, you still absolutely have you know, active check
fraud occurring. There were, you know, thousands of incidents reported
(04:34):
to the SEC. Losses over you know, a few million
dollars in last year, and a lot of times you
don't you don't see this happening, usually at a bank,
but you'll get a check and then you go to
a check cashing type facility, and that's how you can
defraud those individuals by by forging a check and getting
(04:54):
them to cash that check on the stock.
Speaker 1 (04:56):
If you were in the room where they were discussing
all this and you were red teaming it in other
words they said.
Speaker 2 (05:03):
They said, hey, Houston, I want you to give.
Speaker 1 (05:04):
Us the best arguments against making everybody do everything electronically.
What would be the one or two best arguments against it,
even if they wouldn't have ventured, even if you still
think it's a good idea on balance, well.
Speaker 4 (05:17):
I mean, I think there might be a couple arguments
against it. You know, first of all, let's take a
little bit of a step back in time. You know,
the reason why the Social Security benefits and VA benefits
today are ninety nine percent plus electronic is that that
was actually an initiative that started almost thirty years ago
by Congress. I guess back when they you know, did
(05:38):
stuff in nineteen ninety six, and it was a Debt
Collection Improvement Act. And so what you're seeing there is,
you know, the Treasury didn't put a deadline until twenty ten,
and that deadline was twenty thirteen. But you know, twenty
some odd years and you still have one percent or
so of recipients that meet that are accepted. They need
(05:58):
payper checks for one reason or another, the elderly, special
needs individuals, et cetera. So you know, even if we
get this done as fast as the Executive Order is
requiring us. We know we're still going to have some
percentage that are going to be exempted, so we're not
going to necessarily get to zero. And we haven't seen
our ability to get to zero even over thirty years
(06:19):
in the past. So you ask yourself how much money
will we actually save? Can we get rid of all
the check printing equipment entirely?
Speaker 3 (06:28):
And we may not be able to.
Speaker 4 (06:30):
So one possible argument against it is are we going
to spend more money on this initiative than we're going to? Say?
Speaker 2 (06:37):
All right, let's see.
Speaker 1 (06:39):
Let me just interject you here because we've only got
about a minute and I have a few listener questions
I want to ask you, So give me, you know,
as quick an answer as you can. On some of
these with ach payments going to the federal government, would
I expect there to be a fee?
Speaker 4 (06:55):
No, you should not expect a fee for ahe payments
sent to the federal government.
Speaker 2 (07:00):
When will this start? I think it's late September, right.
Speaker 4 (07:04):
September thirtieth, is you know, when the Executive Orders has
stated the I R S and other departments need to
have this in effects by you know, we'll see I
guess coming up what the exemptions will be if they're
you know, how easy it might be to you know,
wiggle out of this requirement if you're kind to get
(07:25):
out of this requirement at that time. So this will
apply to really any kind of payment, like not just
your full ten forty payment, but core estimated quarterly taxes
and really anything you can think of with the I
R S and and much of the rest of the government. Right,
that's right, So any payments you make to the I
r S and then any refunds that you get.
Speaker 1 (07:45):
Back from the edde okay, and the last one. And
I think this question is going to come up a lot,
but give me as quick an answer as you can.
But will the IRS be able to automatically take money
from my account?
Speaker 2 (07:56):
That concerns me.
Speaker 4 (07:57):
Well, today the I r S does not automatically debit
any accounts, so that is not something that they do today.
I you know, couldn't project or predict the future. It
seems like they would not be able to do that
unless you gave.
Speaker 3 (08:13):
Them explicit authority.
Speaker 4 (08:15):
To make that debit. But but you know, as of today,
that's that's the only way you can have your account
debited is when you give them the explicit authority to
make that debit. There are not automatic debits that are
occurring by the I R S.
Speaker 2 (08:31):
Okay, I lied when I said that'll be the last one.
Speaker 1 (08:33):
One more for for somebody who is old school, used
to doing this on paper.
Speaker 2 (08:37):
Maybe used to writing a check.
Speaker 1 (08:38):
What's the best way for folks like that to learn
how to comply with this, whether it's for them personally
or maybe even for businesses.
Speaker 4 (08:46):
Uh, ask your tax accountant would be probably your number
one way, and then you can do your own research.
The I R s will be sending out notices, I'm sure,
posting notices on ways to comply and what.
Speaker 3 (09:00):
They're going to do.
Speaker 4 (09:01):
You know, if you're currently receiving a paper check, but uh,
but but you know you should you should learn about
it online or through these notices. But always ask your
tax accounts.
Speaker 1 (09:10):
Houston Frost is chief product officer for uc O. They're
an embedded payment solutions company. H U s i O
dot com is the link. Thanks for your time, Houston,
great and informative conversation.
Speaker 2 (09:21):
Appreciate it.
Speaker 3 (09:23):
Thank you so much.
Speaker 4 (09:24):
Ross
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