The Federal government is taking a major step toward modernizing how it sends and receives money. A new executive order directs agencies to phase out paper checks and money orders and move to secure electronic payments wherever the law allows.
Paper-based payments are costly and risky. Government checks are far more likely than electronic payments to be lost, stolen, delayed, or altered. Mail theft has risen sharply since the COVID-19 pandemic, and in fiscal year 2024 alone, taxpayers spent over $657 million maintaining systems needed to process paper payments. Electronic payments are faster, safer, and significantly more efficient.
What’s Changing?
- The Treasury Department will stop issuing most paper checks for Federal payments, including benefits, vendor payments, and tax refunds.
- Federal agencies will transition to electronic funds transfer (EFT) options such as direct deposit, prepaid cards, debit and credit cards, digital wallets, and real-time payment systems.
- Payments made to the Federal government (such as taxes, fees, fines, and loan payments) will also move to electronic processing.
- Treasury will work to eliminate the need for physical lockboxes used to receive mailed payments.
Exceptions and Support
Limited exceptions will remain for individuals without access to banking services, certain emergency situations, national security or law-enforcement needs, and other approved circumstances. Those who qualify will be offered alternative payment options.
What Agencies Are Doing
The Treasury Department will lead a public awareness campaign to help recipients understand and set up electronic payments. Agencies will coordinate closely to ensure a smooth transition, protect personal and financial data, and support unbanked and underbanked populations.
Overall, this shift is designed to reduce fraud, lower costs, improve efficiency, and strengthen the security of Federal payments—bringing government financial operations into the digital age.