An executive order from President Trump will require government agencies to make electronic payments for tax refunds, Social Security and other benefits as of Sept. 30.
Paper checks issued for tax refunds, Social Security payments and other government benefits have been dwindling and will soon be eliminated, potentially affecting hundreds of thousands of Americans.
President Trump signed an executive order on March 25 directing the federal government to stop issuing paper checks as of Sept. 30. Instead, government agencies must make payments electronically, by direct deposit to a bank account, debit card or digital wallet.
“This executive order will defend against financial fraud and improper payments, increase efficiency, reduce costs and enhance the security of federal payments,” a White House spokeswoman, Liz Huston, said in an emailed statement.
Most monthly Social Security payments and annual tax refunds are already paid by direct deposit, agency statistics show. Yet the administration said it was further “phasing out” paper to modernize how the government handled money. A fact sheet about the order said the government aimed to switch “from old-fashioned paper-based payments to fast, secure electronic payments.”
The order gives the Treasury Department just six months to carry out the mandate — “a very aggressive time frame,” Steve Kenneally, senior vice president of payments with the American Bankers Association, said on an ABA Banking Journal podcast. The order is nevertheless “welcome,” the association said, because electronic payments are “a much faster, cheaper and safer choice” for consumers and the government.
The Treasury Department did not respond to a request for comment.
Jennifer Tescher, chief executive of the Financial Health Network, said that doing away with paper checks was the right thing to do but that “consumer awareness and help making the shift” would be critical to making the change go smoothly.