On March 25, 2025, President Donald J. Trump signed an Executive Order to modernize how the Federal government processes payments. The Order mandates the cessation of paper check payments by September 30, 2025, requiring all government disbursements to be conducted through electronic funds transfer (EFT) methods such as direct deposit and digital wallets. This initiative aims to reduce costs and enhance security by addressing the inefficiencies of traditional paper-based payment systems.

The transition to electronic payments is expected to help address issues related to financial fraud and improper payments. Paper checks are significantly more vulnerable to theft and fraud compared to electronic transactions, with historical data indicating that Treasury checks are 16 times more likely to encounter problems such as being lost or altered. Furthermore, the costs associated with maintaining physical payment systems are substantial, amounting to over $657 million in fiscal year 2024, which has prompted the government to adopt more efficient digital methods.

The Executive Order also includes provisions for a public awareness campaign to educate recipients about the shift to electronic payments and to assist them in setting up new payment options. Exceptions to the new policy will be made for individuals without access to banking services, as well as for specific emergency situations. Overall, this modernization effort reflects a commitment to improving government operations and enhancing the user experience for American citizens.

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