US President Donald Trump has signed an Executive Order to modernise the way the Federal Government handles payments, eliminating outdated paper-based transactions in favour of fast, secure electronic payments.

The White House states that this initiative aims to enhance efficiency, reduce costs, and bolster security across all government disbursements and collections.

Effective 30 September 2025, the Federal Government will cease issuing paper cheques for all payments, including intragovernmental transactions, benefits, vendor payments, and tax refunds.

Under the Executive Order, all executive departments and agencies must transition to modern electronic funds transfer (EFT) methods, such as direct deposit, debit and credit card payments, digital wallets, and real-time transfers.

Additionally, payments made to the Federal Government – including fees, fines, loans, and taxes—must be processed electronically wherever permitted by existing law.

The Department of the Treasury will phase out physical lockbox services and accelerate the adoption of electronic receipts for Federal payments.

To ensure a smooth transition, a comprehensive public awareness campaign will be launched to educate Federal payment recipients on the shift to electronic options and provide guidance on setting up digital payments.

Exceptions to this policy will be made in cases where individuals lack access to banking or electronic payment systems, the White House added.

Certain emergency payments, law enforcement-related disbursements, and other special circumstances will also be accommodated under the Executive Order or other applicable laws.

This policy does not establish a Central Bank Digital Currency (CBDC).

President Trump’s Executive Order is part of a broader effort to crack down on financial fraud and improper payments.

Paper-based transactions, such as cheques and money orders, are increasingly vulnerable to fraud, theft, and inefficiencies, imposing unnecessary costs and delays on both the government and the public.

Mail theft complaints have risen substantially since 2020, and Treasury cheques are 16 times more likely to be lost, stolen, returned undeliverable, or altered compared to electronic transfers.

In 2022 alone, banks reported 680,000 cases of cheque fraud, nearly double the number from 2021.

Maintaining the infrastructure to process paper payments cost the American taxpayer more than US$657 million in fiscal year 2024.

Featured image credit: edited from freepik