Sometimes a product or service comes to a crossroads. It might go the way of Borders bookstores and simply close — or the people in charge can take a step back to assess where their brand fits in the current marketplace and what the next move could be to right the ship. So goes the story of the explosively popular prebiotic drink, Poppi. Originally branded as “Mother Beverage,” the husband-wife duo behind the drink were selling their drink in glass bottles at niche retailers and farmers’ markets. After an appearance on “Shark Tank”, their investor helped them rebrand as “Poppi”, complete with a packaging redesign to bright, fruit-inspired can designs.With the ever-changing payments industry, the Federal Reserve is finding some of its services at a similar crossroads. The Fed recently issued a request for input on the future of its check services, asking financial institutions and industry partners to share how they use these services today, what challenges they face, and how possible strategic changes could affect their operations. While this request does not signal any immediate changes, it marks an important moment for the industry. It gives CFIs the opportunity to help shape how check services may evolve at a time when payment preferences continue to shift and check volumes steadily decline.The request follows an earlier announcement from Federal Reserve Financial Services that it will discontinue FedGlobal ACH payments to Mexico and Panama and sunset the Foreign and Canadian Check Service by the end of 2026. Together, the two developments point to a broader evaluation of how the Fed supports check processing and cross-border payments. For community financial institutions, it is a timely reminder that planning for operational continuity is essential, particularly when older services begin to wind down and new options gain traction.A Closer Look at the Fed’s Request for InputThe Board’s request invites comments on several areas related to check usage, operational challenges, cost considerations, and customer preferences. It also asks about the potential impact of future changes, though no specific proposals are on the table. Instead, the Fed is gathering baseline insights to better understand how check services fit into today’s banking environment.This matters for CFIs for two reasons. First, checks continue to play a meaningful role for many customers, especially in business payments and certain consumer segments. Second, check processing relies on a network of counterparties and vendors. Even modest shifts by the Fed could influence how item processors, correspondent banks, and integrated platforms support check clearing going forward.By seeking industry input now, the Fed is giving institutions an early chance to highlight the operational realities they face and to ensure future decisions take those needs into account. For many CFIs, participating in the request for input may be worth considering, particularly if check volumes remain significant or if current services play a key role in customer support.International Services Reach a Sunset PhaseWhile the Fed’s request for comment relates to domestic check services, the earlier announcement about international services is already set in motion. FedGlobal ACH to Mexico and Panama, as well as the Foreign and Canadian Check Service, will be discontinued in 2026. These offerings have seen reduced volumes over time, and the Fed is reallocating resources toward services with broader industry use.Still, these changes carry operational implications for CFIs. Institutions that rely on these services need sufficient time to transition their customers, revisit vendor connections, and determine which partners can support the cross-border capabilities they will continue to offer. Many CFIs use international checks or FedGlobal ACH infrequently, but even low-volume needs require reliable alternatives when a long-standing service sunset approaches.What CFIs Can Do NowEven though the Fed’s domestic review is still exploratory, the combination of these developments offers CFIs a chance to assess their readiness. The following steps may help guide internal planning:
- Evaluate your current reliance on Fed check services. Understanding where these services sit in your workflows will make it easier to respond if changes emerge in the coming years.
- Review cross-border processes. With several international services already scheduled to sunset, mapping out replacement channels now can help maintain continuity for customers.
- Connect with vendors. Changes to Federal Reserve check services often influence your upstream and downstream providers. Early conversations can clarify each vendor’s plans and any support they may offer during transitions.
- Consider participating in the Fed’s request for input. Institutions that rely on checks for key segments may want to share their experiences to help inform the Fed’s evaluation.
- Plan customer communication early. Even minor adjustments can create questions for businesses or consumers accustomed to certain services. Preparing clear guidance ahead of transitions can help reduce confusion.
Support for International Payment AlternativesAs the industry moves through these shifts, CFIs may benefit from partners with established global payment and check processing capabilities. PCBB offers several options that can support institutions during and after the Fed’s sunset period, including Canadian Check Image, international wires, FX, collection items, and currency services. These services can help CFIs maintain a consistent customer experience as they migrate away from offerings scheduled to end.A Moment to Prepare, Not to ReactThe Fed’s request for input is not a signal of immediate change. Instead, it is an early step in understanding how check services could evolve. When paired with the upcoming discontinuation of several international services, it highlights the importance of thoughtful planning. CFIs that review their processes now, engage with their vendors, and prepare for necessary transitions will be better positioned to navigate whatever adjustments may come.
