Phasing Out Paper Checks: A Major Step Towards Modern Financial Management

Today, President Donald J. Trump signed an executive order to modernize the government's financial management methods, transitioning from outdated paper payments to fast and secure electronic payments.

Key Changes in Payment Systems

The order stipulates that, as of September 30, 2025, the federal government will cease issuing paper checks for all expenditures, including:

• Intra-government payments
• Benefits
• Vendor payments
• Tax refunds

All executive departments and agencies must transition to modern electronic funds transfer (EFT) methods, such as:

• Direct deposit
• Debit/credit card payments
• Digital wallets
• Real-time transfers

Implementation Details

Fees, fines, loans, and tax payments to the federal government must also be processed electronically, where permitted by current law. The Treasury Department will:

• Phase out physical collection box services
• Accelerate the electronic collection of federal government receipts
• Conduct a comprehensive outreach campaign to inform recipients about the transition
• Provide guidance on setting up digital payments

Exceptions and Limitations

Exceptions may be granted for:

• Emergency payments
• Specific law enforcement activities
• Other special situations where exceptions are allowed under this executive order or other existing laws

Note: This executive order does not establish a central bank digital currency (CBDC).

Protection Against Financial Fraud

President Trump is combating waste, fraud, and abuse in government by modernizing the outdated paper-based payment system that creates unnecessary costs, delays, and security risks.

Current Challenges with Paper Payments

Paper payment methods like checks and money orders involve several risks:

• Unnecessary costs
• Delays
• Fraud
• Payment loss
• Theft
• Inefficiency

Statistics and Impact

• Since 2020, complaints about mail theft have significantly increased
• Treasury checks are 16 times more likely to be reported lost, stolen, undeliverable, or altered compared to electronic transfers
• Maintaining physical infrastructure and expertise for paper records cost American taxpayers over $657 million in fiscal year 2024
• Banks reported approximately 680,000 check fraud cases in 2022, nearly double that of 2021

Moving Forward

Digital payments offer significant advantages:

• More efficient processing
• Cost-effective operations
• Reduced susceptibility to fraud

As President Trump has stated, "The government needs to keep pace with the technology revolution." This executive order represents a significant step forward in modernizing federal financial management and better serving the American people.