One point of your depiction of the US system I haven't seen other replies address: You can easily and for no fees (though not quickly) transfer money to other people with paper checks. That's the main reason they are used these days. I haven't seen anyone (try to) pay using a paper check at a store in years. Most banks allow for electronic deposits of checks with smartphones so it's not even that inconvenient. Not to say this is an ideal state of affairs (checks can take days to clear and not everyone has access to accounts that can write paper checks) but it's not quite as dire as you portray it.