An executive order signed by President Donald Trump earlier this year is set to overhaul how the federal government handles financial transactions. Starting September 30, the U.S. Treasury will stop issuing paper checks for all federal disbursements and will no longer accept paper checks as payment.
This mandate covers intragovernmental payments, benefits, vendor payments, and tax refunds, aiming to reduce costs, fraud risks, delays, and inefficiencies tied to paper-based payments. The executive order cites that maintaining paper processing infrastructure cost over $657 million in fiscal year 2024.
All federal departments and agencies will transition to electronic funds transfer (EFT) methods such as direct deposit, prepaid cards, and other digital payment options. Agencies are tasked with enrolling recipients in EFT systems and working with partners to improve access for unbanked and underbanked populations.
However, exceptions will apply for individuals without access to banking services, certain emergency payments, national security-related transactions, and other special circumstances determined by the Treasury Secretary.
The order also calls for a public awareness campaign to ensure a smooth transition to electronic payments.