Trump mandates digital payments for federal transactions

President Donald Trump signed an executive order requiring the U.S. Treasury to eliminate paper checks for federal payments by September 30, 2025, shifting all disbursements and receipts to electronic methods. 

The move aims to modernise outdated systems, reduce fraud, and centralise payment processing under the Treasury.

The order impacts tax refunds, vendor payments, and other federal transactions, directing agencies to adopt digital tools like direct deposit, debit cards, and real-time transfers.

“These are steps that should have taken place decades ago,” Trump framed the change, calling it overdue.

While 98% of federal payments already occur electronically, persistent use of paper checks—particularly in certain demographics and agencies—remains a target.

The Treasury cites FinCEN data showing $688 million in mail-theft-related check fraud over six months in 2024, highlighting security risks.

The order centralises payment oversight under the Treasury and mandates a public awareness campaign to guide recipients through the transition.

Exemptions apply for individuals without banking access or in hardship situations, as well as national security-related cases.

The shift aligns with broader digitisation efforts tied to the Department of Government Efficiency (DOGE), a controversial task force accelerating payment reforms.

Critics note privacy concerns and planned layoffs at Treasury bureaus under DOGE directives, though specifics remain undisclosed.

Treasury Secretary Scott Bessent has emphasised cost-cutting, including lower bond yields to reduce borrowing expenses.

The move to digital payments is seen as part of a broader fiscal overhaul, aiming to improve fraud detection, cash flow, and oversight of taxpayer funds.

While the order marks a significant step toward modernising federal financial infrastructure, challenges like public adoption and operational adjustments loom.

The administration’s focus on centralisation and efficiency reflects a push to streamline government operations, though critics question the impact on vulnerable populations and workforce reductions.