President Donald Trump signed
"President Trump has long championed the need for replacing outdated technology, saying 'government needs to catch up with the technology revolution,'" the executive order stated Tuesday. "Paper-based payments, such as checks and money orders, impose unnecessary costs, delays, and risks of fraud, lost payments, theft, and inefficiencies."
The order specifies that all disbursements — including payments across agencies, government benefits, payments to vendors and tax refunds — are included in the order. Where permissible by law, all payments to the government by citizens — such as fees, fines, taxes and loan payments — must also be paid electronically.
The administration said it would inform payments recipients of the new electronic payment standards through a public awareness campaign and would make exceptions for Americans without electronic payment access, for emergency payments and for certain law enforcement activities that may still require paper checks.
The administration said moving away from paper would reduce inefficiencies as digital payments are quicker, less costly and less vulnerable to fraud.
"Historically, Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable, or altered than an electronic funds transfer," the order stated. "Maintaining the physical infrastructure and specialized technology for digitizing paper records cost the American taxpayer over $657 million in fiscal year 2024 alone [and] check fraud is
Check fraud has grown as a concern for the banking industry in recent years; reports indicate that instances of such fraud doubled from 2021 to 2022. Target stores said last year that they would stop accepting paper checks, citing customers' low usage of the payment format. Federal Reserve
Adam J. Levitin, the Carmack Waterhouse Professor of Law and Finance at Georgetown Law School, noted following the order that paper checks are also a low volume of Treasury payments. In 2024, the department issued 36 million paper checks — only 3% of the total number of payments.
Most payments made to the federal government are tax payments. Levitin said the executive order would increase the cost of paying taxes.
"Right now, if you want to pay your taxes by check, it's free,"
Some people may continue to need to receive paper checks, particularly older retired Americans who receive their Social Security benefits through the mail. The Treasury began to phase out paper Social Security checks for new applicants in 2011, but many still receive them. The Social Security Administration
A bank industry trade group responded positively to the announcement. Scott Anchin, payments expert at the Independent Community Bankers of America, said while the executive order's move toward electronic payments was positive, consumers and banks should be given some flexibility in what form of payments they choose to use.
"It's a great sign that the government is leading the way toward reduced check usage by phasing out paper checks for government payments," Anchin said, while also advocating that banks and their consumers may continue to choose the right payment mechanisms.
Rob Nichols, president and CEO of the American Bankers Association, also supported the move, saying the industry he represents would help with transitioning customers to the new standards.
"Despite a continued decline in business and consumer use of checks, check fraud has continued to rise. Electronic payments are a much faster, cheaper and safer choice for consumers and the federal government," Nichols said. "We look forward to working with the administration to make sure consumers are ready for this transition, which will also provide another important opportunity to further reduce the number of unbanked in the country from the current record low of 4%."
