[VT Washington, D.C] March 25, 2025 – President Donald J. Trump signed a sweeping Executive Order on March 25, 2025, directing all federal agencies to phase out paper-based payments and receipts by September 30, 2025, and adopt modern electronic payment systems where legally permissible.
The order cites inefficiencies and risks associated with physical checks, including higher fraud rates, delays, and costly infrastructure. Treasury Department data reveals that paper checks are 16 times more likely than electronic funds transfers (EFT) to be lost, stolen, or returned. In fiscal year 2024 alone, maintaining systems for paper processing cost taxpayers over $657 million.
Under the directive, all federal disbursements—such as benefits, tax refunds, vendor payments, and intragovernmental transfers—must transition to electronic formats. These may include direct deposit, prepaid card accounts, digital wallets, and real-time payments. Likewise, payments received by the federal government, including taxes, fees, and fines, must be processed electronically whenever feasible.
The Treasury Secretary will oversee this transformation, working with agencies including the Departments of State, Health and Human Services, Education, Veterans Affairs, and Homeland Security to eliminate physical lockbox services and ensure electronic collection.
Limited exceptions will be granted, such as for individuals without access to banking services, certain emergency payments, or operations related to national security or law enforcement. The Treasury will provide alternative payment solutions for those qualifying for exemptions.
To support the transition, the Treasury will launch a nationwide public awareness campaign, assist agencies in outreach and onboarding, and collaborate with financial institutions and advocacy groups to improve access for unbanked and underbanked populations.
Within 90 days, agencies must submit compliance plans to the Office of Management and Budget. The Treasury must report progress to the President within 180 days.
The order affirms it does not establish a Central Bank Digital Currency and will be implemented in accordance with existing law, without creating enforceable rights or obligations for individuals or entities.
