U.S. Government to go fully digital with payments under Trump’s order

By Gloria Methri

In a significant move to modernise the federal government’s financial transactions, President Donald Trump signed an executive order on March 25, 2025, mandating the transition from paper-based payments to electronic methods. Effective September 30, 2025, all federal disbursements—including benefits payments, vendor payments, and tax refunds—will be processed electronically.

The executive order aims to enhance efficiency, reduce costs, and minimise fraud associated with paper checks. According to the Treasury Department, maintaining physical infrastructure for paper payments cost taxpayers over $657 million in the Fiscal Year of 2024. Moreover, Treasury checks are reportedly 16 times more likely to be lost or stolen compared to electronic funds transfers.

Under the new directive, federal agencies are required to adopt electronic funds transfer (EFT) methods such as direct deposits, debit and credit card payments, digital wallets, and real-time payment systems. Payments made to the federal government, including fees, fines, loans, and taxes, must also be processed electronically where permissible by law.

The order includes provisions for limited exceptions. Individuals without access to banking services, certain emergency payments, and specific national security or law enforcement activities may continue to use non-EFT transactions. The Treasury Department is tasked with reviewing and revising procedures to accommodate these exceptions.

To facilitate the transition, the Treasury will centralise payment processing and launch a comprehensive public awareness campaign. Agencies are required to submit compliance plans within 90 days, detailing steps to enroll recipients in electronic payments and address potential challenges.

Phil Bruno, Chief Strategy and Growth Officer at ACI Worldwide, highlighted the broader implications of the order. “The real story behind the White House’s Executive Order isn’t just that federal payments are going digital – it’s that Washington is taking a more proactive and assertive approach as a central player in how money moves across the entire economy,” he said.

Bruno pointed out that while countries like Brazil and India process billions of instant payments a month, the U.S. has lagged due to its market-driven approach. “For decades, U.S. policymakers have taken a more market-driven approach as a ‘convener’ for the private sector, hoping it would lead on real-time payments and fraud prevention at a rapid pace. As a result, the pace has been slow in comparison to other countries,” he explained. “This EO flips the script. It empowers the Treasury not only to modernise its systems but also to model what a future of real-time, fraud-resistant payments will look like.”

The executive order also responds to growing concerns over fraud in traditional payment methods. In 2024 alone, authorised push payment (APP) fraud losses hit $2.2 billion in the U.S. By accelerating digital transformation, the government aims to mitigate these risks and enhance security in federal financial transactions.

Bruno suggested that the move could have long-term policy implications. “This could set the tone for broader regulatory or policy moves, from mandatory adoption of FedNow to stronger protections for scam victims. In hindsight, this could be remembered less as a back-office fix and more as the moment the U.S. government took a leadership role at driving digital transformation of the payments arena at scale and with purpose.”

This modernisation effort is expected to impact nearly half a million Americans who currently receive paper Social Security checks. The Social Security Administration is providing guidance to assist recipients in switching to direct deposit or other electronic payment methods.