This executive order, signed by President Donald Trump on March 25, 2025, aims to modernize U.S. payment systems by moving from paper payments (checks and money orders) to electronic ones. The main objectives of the document are to increase efficiency, reduce costs, reduce fraud and improve the security of financial transactions.
Key Points:
1️⃣ ProblemsA: Using paper cheques creates unnecessary costs, delays and risks of fraud, lost payments and theft.
Examples:
- Treasury checks are 16 times more likely to be lost, stolen, or returned as undelivered than wire transfers.
- Maintaining the infrastructure to process paper payments will cost taxpayers more than $657 million in fiscal 2024.
2️⃣ ObjectiveA: By September 30, 2025, the federal government must stop issuing paper checks for all types of payments, including Social Security payments, tax refunds, and vendor payments. All payments must be made through electronic methods such as direct deposit, prepaid cards and digital wallets.
3️⃣ Exceptions: There are exceptions for cases where the use of electronic payments is not possible, for example: for people without access to banking services (unbanked population).
- For urgent payments where electronic transfers may cause difficulties.
- For national security or law enforcement operations.
4️⃣ Support for the population: The Department of the Treasury will conduct an outreach campaign to notify federal payees of the transition to electronic payments and provide them with instructions for setting up digital payment methods.
5️⃣ Responsibilities of the AgencyA: Federal agencies are required to coordinate with Treasury to ensure a smooth transition and support for affected individuals and organizations.
Important implications: The transition to electronic payments will significantly reduce costs, increase transaction speed and reduce errors.
- Vulnerable categories of the population (e.g. the unbanked) will be given alternative options for receiving payments.
- The electronic system will facilitate the development of advanced technologies such as digital wallets and instant payment systems.
ConclusionA: This decree is an important step towards the digitalisation of the US economy. It not only solves the current problems associated with paper-based payments, but also creates the foundation for a more secure and efficient financial system.