US President Donald Trump issued an executive order on 25 March 2025 to modernise the Department of Treasury’s payment systems.
In the executive order “Modernizing Payments To and From America’s Bank Account,” Trump instructed the Treasury Secretary to stop issuing paper checks for all federal payments, including tax refunds, by 30 September 2025.
In the executive order, it was mentioned that the continued use of paper-based payments by the Federal Government, including checks and money orders, flowing into and out of the United States General Fund, which might be thought of as America’s bank account, imposes unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies. Mail theft complaints have increased substantially since the COVID-19 pandemic. Historically, Department of the Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable, or altered than an electronic funds transfer (EFT). Maintaining the physical infrastructure and specialised technology for digitising paper records cost the American taxpayer over USD 657 million in the Fiscal Year of 2024 alone.
The text of the fact sheet in the executive order included the following:
- 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 where permissible under existing law;
- Treasury will phase out physical lockbox services and expedite the 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;
- This executive order does not establish a Central Bank Digital Currency (CBDC).
This order promotes operational efficiency by mandating the transition to electronic payments for all Federal disbursements and receipts by digitising payments to the extent permissible under applicable law.
The executive order allows exceptions to electronic payments when not feasible, such as for individuals without banking access, emergencies causing undue hardship, or national security and law enforcement activities requiring non-EFT transactions.
