Trump order pushes federal government toward electronic payment methods
The federal government will shift from paper-based payments to electronic methods, part of what the White House said in a Tuesday executive order is an attempt to cut costs and reduce fraud.
President Donald Trump’s EO on “modernizing payments to and from America’s bank account” requires the Treasury Department to phase out paper check disbursements and receipts by Sept. 30. That includes intragovernmental payments, benefits payments, vendor payments and tax refunds. Federal agencies will be expected to transition to electronic funds transfer (EFT) methods, including direct deposit, prepaid card accounts and other digital options.
“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,” the order states.
All payments made to the federal government should be processed electronically “as soon as practicable,” per the order. Exceptions can be made for individuals who do not have access to banking services or electronic systems, in emergency situations “where electronic disbursement would cause undue hardship,” in cases with national security or law enforcement implications, and in other circumstances as determined by the Treasury secretary.
The secretaries of State, Treasury, Health and Human Services, Education, Veterans Affairs and Homeland Security are tasked with taking “appropriate action to eliminate the need for the Department of the Treasury’s physical lockbox services and expedite requirements to receive the payment of Federal receipts, including fees, fines, loans, and taxes, through electronic means,” the EO reads.
The Treasury secretary, meanwhile, is charged with supporting agencies’ transition to digital payment methods, including by providing access to its centralized payment systems for direct deposits, debit and credit card payments, digital wallets, real-time payment systems and other modern electronic options.
The top Treasury official is also tasked with leading other agency heads in the coordination of a public awareness campaign, which should inform federal payment recipients of the change and how to set up electronic payment options.
A separate executive order issued Tuesday paves the way for the country’s transition to digital payments, updating Office of Management and Budget guidance and bolstering verification policies for Treasury payments systems.
Tuesday’s orders are the latest in a Trump push to digitize government payments. An EO released in February called for the creation of DOGE-linked agency payment-tracking systems. That order would pair agency heads with team leads from the Elon Musk-led group to build internal IT systems to track contracts, grants and other expenditures.
