President Donald Trump has issued an executive order instructing the U.S. Treasury Department to phase out paper checks for all federal payments by September 30, 2025. The move is part of a broader initiative to modernize the government’s financial systems, reduce fraud, and improve efficiency in payment processing.
Under the new mandate, all disbursements—including tax refunds, federal benefits, vendor payments, and intergovernmental transfers—will transition to electronic formats such as direct deposits, prepaid debit cards, and other digital payment methods. The Treasury is also directed to accept incoming payments electronically “as soon as practicable,” signaling a shift toward end-to-end digital transaction systems.
The administration cited several reasons for the shift, including cost savings and enhanced security. Treasury checks are reportedly 16 times more likely to be lost, stolen, or fraudulently altered than electronic payments. In 2024 alone, maintaining infrastructure for physical check processing cost taxpayers more than $657 million, according to the executive order.
Beyond cutting costs, the policy aims to reduce vulnerability to fraud and streamline disbursement operations across federal agencies. By eliminating reliance on paper-based processes, the Treasury expects to improve payment accuracy and accelerate delivery times—particularly important for benefits programs and tax refund distributions.
As the September deadline approaches, government departments and agencies are expected to take steps to align with the new requirements. The transition marks a significant shift in how the federal government handles its financial obligations and reflects growing momentum behind digital transformation in public sector finance.
With this order, the U.S. joins a growing number of governments worldwide prioritizing digital infrastructure over legacy systems, signaling a long-term commitment to financial modernization and operational resilience.
