CNBC reported that the U.S. Treasury Department is slowly eliminating paper checks after President Donald Trump signed an executive order requiring all federal departments and agencies to switch to electronic payments.
In a statement, the White House said electronic payments are an attempt to “modernize” how the government handles money, leaving old-fashioned paper payments to “fast, secure electronic payments.”
“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.
With a Sept. 30 deadline, the agency has an estimated six months to phase out paper checks used for tax refunds and close to 456,000 Social Security monthly mailed checks. The order forces all government departments and agencies to issue disbursements with electronic transfer methods, including direct deposit, digital wallets, debit or credit card payments and real-time transfers.
According to Kiplinger, as a directive from Trump, Treasury Secretary Scott Bessent is expected to embed exceptions for individuals who don’t have access to banking services, specifically in cases like emergency payments. Bessent is scheduled to submit an implementation plan for such measures within 180 days.
Bankers and experts seem excited about the move, citing that check fraud is rising.
“We welcome President Trump’s executive order mandating that the federal government cease issuing paper checks for all disbursements, including government benefits and tax refunds,” president and CEO of the American Bankers Association, Rob Nichols, said.
“Despite a continued decline in business and consumer use of checks, check fraud has continued to rise.”
CEO of LexisNexis Risk Solutions’ government group, Haywood Talcove, said, “Checks aren’t safe anymore,” highlighting a 2024 report from the U.S. Government Accountability Office that revealed the federal government could lose between $233 billion and $521 billion a year to fraud.
The Trump administration could face some strains with the changes. With a large number of people receiving paper Social Security checks, individuals who are unable to adapt to the digital changes will require in-person support. This will be a challenge since the administration has made labor cuts to the federal agency, including a number of local Social Security offices.
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