An Executive Order: What’s the Impact of Eliminating Government Check Payments?

President Donald J. Trump signed an executive order March 25 mandating that the federal government stop issuing paper checks as of Sept. 30, 2025. Instead, government agencies must make payments electronically, by direct deposit to a bank account, a debit card, or digital wallet. 

The government aims to modernize and switch “from old-fashioned paper-based payments to fast, secure electronic payments,” according to a Factsheet about the order. The White House added that paper-based payments “such as checks and money orders, impose unnecessary costs, delays, and risks of fraud, lost payments, theft, and inefficiencies.” 

The U.S. Treasury has about six months to phase out the paper checks it uses for various purposes, including intragovernmental payments, benefits disbursements, vendor payments, and tax refunds. The executive order also requires that payments to the government, such as fees, fines, taxes, and loan payments, must also be made electronically rather than by paper check. 

Similarly, consumers have until the end of September to set up an online bank account or a digital payment option. Limited exceptions will be made for those who do not have access to banking services or electronic payments. The government plans to launch a comprehensive public awareness campaign to inform federal payment recipients of the transition and offer guidance on setting up digital payments. 

This note analyzes how the executive order to phase out paper checks will affect government and consumer payments. How can eliminating check payments improve efficiency and security? How can the government’s efforts to modernize payments help drive innovation and adoption of newer digital payments, such as real-time payments, and open banking in the United States?