President Donald J. Trump put pen to paper on March 25, 2025, signing an executive order to eliminate paper checks for all federal disbursements, including intragovernmental payments, benefits, vendor payments and tax refunds.
The order goes into effect on September 30, 2025. After that date, payments will be made electronically. According to the White House, it’s not just the exposure to the risk of fraud that is behind the decision- it would also save the federal government millions of dollars and reduce delays.
“President Trump is cracking down on waste, fraud, and abuse in government by modernizing outdated paper-based payment systems that impose unnecessary costs, delays, and security risks,” is the statement from the White House on a published fact sheet.
The Trump administration has embraced technology, from supporting AI through the creation of Stargate, an initiative to build AI infrastructure in the U.S., to establishing the Department of Government Efficiency, with a mission to modernize federal technology and software to maximize governmental efficiency and productivity. One of the President’s first appointments in his second term was David Sacks as “White House AI and Crypto Czar.”
“President Trump has long championed the need for replacing outdated technology, saying the government needs to catch up with the technology revolution,” the White House press release stated.
All executive departments and agencies must transition to modern, electronic funds transfers (EFT) methods like direct deposit, debit or credit card payments, digital wallets and real-time transfers. Payments made to the federal government, such as fees, fines, loans, and taxes, must also be processed electronically where permissible under existing law. Exceptions will be made for people without banking or electronic payment access, certain emergency payments, certain law enforcement activities, and other special cases qualifying for an exception under the order or other existing law, the White House statement read.
“The continued use of paper-based payments by the Federal Government, including checks and money orders, flowing into and out of the United States General Fund, which might be thought of as America’s bank account, imposes unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies,” the executive order states. “Mail theft complaints have increased substantially since the COVID-19 pandemic. Historically, Department of the Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable, or altered than an electronic funds transfer (EFT). Maintaining the physical infrastructure and specialized technology for digitizing paper records cost the American taxpayer over $657 million in Fiscal Year 2024 alone.”
The executive order comes with a public awareness campaign. “The Secretary of the Treasury, in coordination with the heads of agencies, shall develop and implement a comprehensive public awareness campaign to inform Federal payment recipients of the transition to electronic payments, including guidance on accessing and setting up digital payment options.”
Deepak Gupta, Global SVP at Volante and a US Faster Payments Council board member, with over 20 years of industry experience, says the real impact of the President’s executive order is “the knock-on effect on the private sector.”
“Many businesses and consumers, anticipating that in the future there may be further restrictions on checks, will act to move away from them,” Mr. Gupta said in an interview with Techstrong. “Banks and other financial institutions will then see a greater rise in volume across all digital and e-payment types as the check volumes plummet even further. This will place a corresponding strain on the legacy systems that process ACH transactions, given that an ACH credit or debit is the lowest cost and most reliable way to convert a check payment to an electronic one. In addition, the check clearing and settlement systems that the banks run will descend further into obsolescence, and the cost of maintaining that infrastructure will rise on a per-payment basis. Unfortunately, banks won’t be able to stop offering check processing any time soon, so the only answer is to offset that spend with increased efficiency elsewhere.”
Over the past 30 years, the federal government has moved in earnest to a paperless system, as previous administrations, and congressional committees, have implemented directives, or passed acts, to eliminate paper record-keeping in favor of electronic versions.
In 1998, Congress passed the Government Paperwork Elimination Act (not to be confused with the Government Paperwork Reduction Act), which went into effect in 2003. An excerpt from the Senate Committee on Commerce, Science and Technology report, stated that the act would save millions and lead to more security.
“The widespread use of electronic forms can greatly improve the efficiency and speed of government services. Such efforts as people traveling to government offices for forms would no longer be required. If implemented, the bill would save the government millions of dollars in costs associated with such things as copying, mailing, filing and storing forms. Electronic signatures can offer greater assurances that documents are authentic and unaltered. They minimize the chances of forgeries or people claiming to have had their signatures forged.”
