WASHINGTON (dpa-AFX) - President Donald Trump has signed an Executive Order to modernize federal payments - switching from old-fashioned paper-based payments to fast, secure electronic payments.
The Order makes it mandatory that from September 30, the Federal government will cease issuing paper checks for all disbursements, including intra-governmental payments, benefits, vendor payments, and tax refunds.
All executive departments and agencies must transition to modern, electronic funds transfer (EFT) methods like direct deposit, debit/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.
Treasury will phase out physical lockbox services and expedite electronic collection of Federal receipts.
A comprehensive public awareness campaign will be launched to inform Federal payment recipients of the shift to electronic options and offer guidance on setting up digital payments.
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 Executive Order makes it clear that it does not establish a Central Bank Digital Currency.
The sweeping change comes as paper-based payments, such as checks and money orders, impose unnecessary costs, delays, and risks of fraud, lost payments, theft, and inefficiencies, the White House said.
Mail theft complaints have increased substantially since 2020.
It is estimated that maintaining the physical infrastructure and specialized technology for digitizing paper records cost the American taxpayer more than $657 million in fiscal year 2024 alone.
Check fraud is becoming more common, with banks issuing about 680,000 reports of check fraud in 2022.
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