The White House has issued an order to transition all federal payments from paper-based methods, such as checks and money orders, to electronic payment systems. This initiative addresses various inefficiencies and risks associated with paper payments, including the higher likelihood of lost or stolen checks, which are reported to be 16 times more susceptible to such issues compared to electronic funds transfers. By mandating the shift to electronic payments, the order aims to improve operational efficiency, reduce costs to taxpayers, and enhance the security of federal transactions.
Under the new policy, effective September 30, 2025, the Secretary of the Treasury will stop issuing paper checks for federal disbursements and will require all agencies to comply with the transition to electronic payment methods. This includes options such as direct deposit, prepaid cards, and digital wallets. Additionally, the order outlines provisions for public awareness campaigns to ensure that recipients are informed about these changes and can smoothly adjust to the new electronic payment systems.
The order also acknowledges the need for exceptions, permitting paper checks in cases where electronic payments are not feasible, including for individuals without access to banking services or in emergency situations. The Secretary of the Treasury is tasked with developing strategies to address financial access for underbanked populations, ensuring that the transition to electronic payments is inclusive. Overall, this move aims to modernize federal payment systems while maintaining security and accessibility for all Americans.
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